America is spending millions of public healthcare dollars on inefficient, inaccurate IT systems by big companies who refuse to be transparent about their operations.
That’s according to a new report from U.S. Senate Finance Committee members Sens. Ron Wyden, Elizabeth Warren, Bernie Sanders and Raphael Warnock. Over the course of a year, they investigated how “a small handful of companies—some whose technology has a history of grievous errors—” are responsible for the eligibility systems that millions of Americans rely on to access Medicaid.
In any other industry, errors would be unfortunate. But in health insurance, these are potentially life-threatening mistakes. Every eligible person wrongly denied Medicaid has a horror story.
These same companies will be responsible for implementing the H.R. 1 requirements that Congressional Republicans passed in 2025. This is the “One Big, Beautiful Bill Act” (OBBBA) that is predicted to cut nearly $1 trillion over 10 years from Medicaid and that added eligibility restrictions in the form of proving the number of hours you are working, volunteering or going to school.
The bill carved out exemptions to these new requirements for disabled people, parents of young children and caregivers. But those protections depend on computer systems correctly recognizing who qualifies. States are paying millions to update their systems and the report raises serious doubts about whether contractors will be able to deliver.
“[W]ithout stronger oversight and real accountability, these contractors are just going to get a jumbo windfall for creating systems that actually harm Americans trying to get health care,” Wyden said in the report.
I have been ringing this alarm bell for a while now, too. For years, disabled children I know (and my own) have been erroneously denied Medicaid due to Oregon’s ONE system, created by the company Deloitte. Our children qualify through a disability-based pathway. Their disabilities do not change. Yet, every year we are forced through the full application as if our entire family were applying to Medicaid, SNAP and other programs on the basis of income, which we aren’t.
I gave a presentation on this phenomenon to our state’s Senate Human Services Committee in September. In it, I likened the ONE System to an IKEA with all the exits and shortcuts blocked off. The solution? Open the shortcuts!
In fact, federal regulation 42 CFR § 435.404 already requires states to give people with multiple eligibility categories the option to apply under the eligibility pathway they choose. Oregon doesn’t, nor does it offer an alternative application that “must minimize burden on applicants.” (42 C.F.R. § 435.907).
It is on this foundation of dysfunction that we are building the new H.R. 1 process. According to the report: “The CBO projects that half of the 5.3 million people who will lose Medicaid coverage under OBBBA’s work reporting requirements by 2034 will do so because the verification process will be too difficult for them to navigate (approximately 2.8 million people).”
The Senate report says Deloitte holds contracts in 25 states totaling at least $6 billion. Here in Oregon, a recent audit said the state had spent $416 million on its ONE system up to 2024. There are some 3,300 state employees with access to the ONE system data and just last spring, the state approved hundreds of new positions and $111 million to implement H.R. 1.
But, c’mon, how bad could it get? It’s not like we’re spending more on paper-pushing than healthcare, right?
Well, in 2023, Georgia started implementing work requirements similar to HR 1 for its Medicaid population. According to the Senate report, from 2020 to 2025, the state spent $54.2 million on administrative costs and about $26.2 million on actual benefits for the poor souls who managed to jump through the extra hoops.
That means Georgia spent more than twice the taxpayer money on red tape than they did on actual healthcare.
And here’s the kicker: we’re not even getting what we’re paying for. Even the Centers for Medicare & Medicaid Services predict that 7 percent of people who meet the requirements or have an exception will still get kicked off the rolls “due to administrative or procedural reasons.”
Do the companies care about the impacts to vulnerable Medicaid clients? The Senate report appended the companies’ responses to their inquiries, “to show the American people the flippancy with which these companies responded to critical Congressional oversight,” In one example, the company Conduent responded to a question about whether they are penalized for wrongfully terminating someone’s eligibility with “N/A. The Medicaid eligibility and ineligibility decisions, including decisions to terminate eligibility, are reserved for each State agency.”
The buck keeps getting passed. And everyone makes out. Except for the people taxpayers intended to help.
It’s hard to wrap our minds around the scale we are talking about. Billions of dollars, millions of people.
So let’s take it down to one person. This week, a friend and fellow Little Lobbyists volunteer came out with this 4-minute video of sweet Clara and everything that’s at stake for her. Give it a watch.
It’s time to demand more of our leaders. Vote in the Nov. 3 elections and reach out to your elected representatives about these companies and their poor track records.
As the report reads: “Their written responses give the Committee no confidence that their systems will be error-free by January 1, 2027.”
Editor’s Note: Medical Motherhood brings you the news you need 50 Sundays out of the year. We take a break twice a year and the next issue, Nov. 8, we will be on vacation. See you back here on Nov. 15!
Medical Motherhood’s news round up
Snippets of news and opinion from outlets around the world. Click the links for the full story.
• From KFF Health News: “Hospital Beds for the Nation’s Sickest Kids Are Disappearing”
Hospital units dedicated to treating the nation’s sickest kids are disappearing nationwide. In the past year alone, hospitals have closed pediatric intensive care units for critically ill kids in Montana, Oregon, and Missouri. Overnight hospital wings for kids have also shuttered in Illinois and California.
[…]Hospitals cutting pediatric care tend to cite low patient volumes; it’s relatively rare for a child to need intensive care. It’s also hard to find doctors to treat those rare cases because the nation is short on pediatric subspecialists, who earn less than those focused on adults. Meanwhile, hospitals are often paid less to treat children than adults, and buying gear tailored to kids adds extra costs.[…]
• From Mother Jones: “Private Contractors Are Set to Cash In as Millions of Americans Lose Healthcare”
On January 1, new Medicaid work requirements will kick in nationwide, and states are scrambling to comply—a chaotic process which will lead to millions of people losing healthcare access.
Many states are paying third-party contractors millions to design and operate systems to determine which Americans remain eligible under the new law. And some of the biggest corporations getting those contracts, according to a new report by members of the Senate Finance Committee, have a track record of “administrative and procedural failures.”[…]
• From 24/7 Wall Street: “Her Disabled Child Will Get a Stock Gift Next Year. If It Lands in the Wrong Account, It Could Count Toward SSI’s $2,000 Limit and Put Medicaid at Risk”
[…]On October 19, 2026, Elon Musk said he would give one SpaceX share to every child in America the following year, calling it the first of multiple planned gifts. He did not initially explain how the shares would be distributed. President Trump later said the giveaway would run through Trump Accounts.
[…]Kathleen Romig, a senior fellow at the Center on Budget and Policy Priorities, told Disability Scoop that exceeding the SSI asset test can suspend and eventually end benefits. Because many disabled people qualify for Medicaid through SSI, she said, excess savings can also jeopardize health coverage and home and community-based services.[…]
• From NPR: “Special ed diaries: Teachers tell NPR about their most joyous, most difficult moments”
[…]There is a shortage of special educators in 45 out of 50 states, according to the Learning Policy Institute, an education research organization. That shortage is growing because the number of special education students is climbing: It's now more than 8.2 million — about 1 out of 6 public school students.
[…]Why is this shortage of special education teachers so persistent?
Let's start with a common misconception: The kids are hard to work with, so teachers don't want to do the job. "That is not the case," said Liz Bettini, a former special education teacher who is now a researcher and professor at Boston University. "That has not borne out in our research at all."
What Bettini's research does show: Special educators can feel isolated from other school staff and feel they have too many student needs to manage. The volume of required paperwork can be crushing. These educators are often responsible for teaching across several subjects and grade levels. Many feel they don't get paid enough to do this essential work.[…]
• From Disability Scoop: “CDC Finds Developmental Disability Prevalence Up ‘Significantly’”
Research from the Centers for Disease Control and Prevention finds that more children across the nation are being diagnosed with autism and other developmental disabilities.
Between 2019 and 2024, the number of parents who said that their child had a developmental disability rose from 16.7% to 20.5%.
[…] Autism alone jumped more than 42%, with sizable growth among children ages 3 to 5, girls, those living outside of metropolitan areas and kids from low-income families.
Meanwhile, the number of parents reporting that their child had ADHD climbed 26%. Learning disabilities and other developmental delay each grew by about 16% while intellectual disability was up more than 6%.[…]
• From Scroll (India): “How children with disabilities are made to jump through hoops to access benefits”
Sangeeta Prajapati applied for a Unique Disability Identity number for her 14-year-old daughter, Om Kumari, in April 2025. Since then, she has spent at least five nights at the All India Institute of Medical Sciences in South Delhi, seeking appointments with specialist doctors to assess Kumari, who has autism.
[…]The union government’s department of empowerment of persons with disabilities has not set out a timeline for the card’s delivery once an application is filed. According to data from the department, currently, it takes an average of 218 days for a disabled person in Delhi to receive their UDID number – this makes it among the top five worst-performing states and union territories in this regard. […]
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