Deloitte's Disturbing Pattern Allegedly Cost Americans Health Coverage, Delayed Benefits, and the US Government $74B

An X user who goes by the name Beaver has carried out an extensive investigation into Deloitte's government contracts and uncovered a troubling pattern. The user found that the US government has wasted $74 billion (£55.1 billion) by working with the consulting giant.

Deloitte is among the largest contractors involved in developing US government IT infrastructure. Whenever Americans access a state benefit system — whether for Medicaid enrolment, unemployment insurance, child welfare case management, or food assistance eligibility — there's a high likelihood that Deloitte played a role in its development.

The pattern identified includes Deloitte winning Medicaid and benefits contracts, launching platforms riddled with systemic errors, leading to citizens losing coverage and facing delays in benefits. Subsequently, state authorities often initiate investigations, and Deloitte is awarded new contracts to 'fix' the problems. This cycle then repeats across different states.

Deloitte has built state Medicaid eligibility systems in over 25 US states, with contracts worth more than $6 billion (£4.4 billion). Ironically, it also receives federal Medicaid funds to validate these same systems, creating a problematic cycle of dependency.

'California's unemployment fraud disaster that cost the state $32 billion? Built by Deloitte. Tennessee kicking 250,000 children off Medicaid? Built by Deloitte. The billion-dollar software project in California that got cancelled after spending the budget? Ding ding ding, Deloitte,' the X user wrote.

Infrastructure Developed by Deloitte Riddled with System Glitches

Over the past 20 years, analysis of contracts, audits, and lawsuits reveals Deloitte has received around $30 billion (£22.3 billion) in federal contracts, with at least a further $10 billion (£7.4 billion) from state contracts.

In every US state where Deloitte has provided services, major system failures have occurred. These include wrongful benefit denials affecting hundreds of thousands of people, vulnerabilities that have led to billions in taxpayer losses due to fraud, and projects that have run five times over budget before being abandoned, according to the X user.

US Government Continues Hiring Deloitte

Deloitte developed California's Employment Development Department (EDD) system, which processed unemployment claims. During the COVID-19 pandemic, this system was overwhelmed and lacked robust fraud detection, leading California to pay over $31 billion (£23.1 billion) in fraudulent claims despite repeated warnings from auditors about its vulnerabilities. Yet, when the pandemic subsided, California again contracted Deloitte to address these issues.

In 2023, states had to verify whether Medicaid recipients still qualified. However, Tennessee's system — developed by Deloitte — experienced glitches, causing over 250,000 children to lose coverage due to processing errors.

California also engaged Deloitte in 2004 to develop a unified court case management system, with an initial budget of $260 million (£193.7 million). By 2012, the project's costs ballooned to $1.9 billion (£1.4 billion), with over 100 change orders, before the state decided to abandon the project altogether.

Deloitte's Role in Federal Lobbying

Deloitte spends over $1.3 million (£968,974) annually on federal lobbying. Its political action committee contributed $3.6 million (£2.6 million) in the last election cycle, evenly split between parties. Additional millions are spent on state-level lobbying.

A significant concern is the revolving door between Deloitte and government agencies. Many former state health officials now work for Deloitte, while Deloitte managers occupy key roles within state IT departments. Even government employees involved in healthcare policy eventually join Deloitte, blurring the lines between public and private sectors.

The X user estimates that the total cost to taxpayers from Deloitte's activities amounts to approximately $74 billion (£55.1 billion). This figure includes $40 billion in contracts and an estimated $34 billion (£25.3 billion) in direct losses from inefficiencies — not accounting for administrative and healthcare costs, and fraud.

Deloitte's systems are deeply embedded within the US government's infrastructure. As the user concluded, nobody in the government wants to fix it because the tax dollars keep flowing in, feeding a cycle that benefits Deloitte while costing the public dearly.