Medicaid Denials Hit Disabled Americans as $768 Million Deloitte Systems Fail, Investigation Finds

Disabled Americans are being wrongly denied Medicaid coverage by error-prone eligibility software that Deloitte has operated in Michigan under contracts worth roughly $768 million (£572 million) since 2006, an investigation published Monday has found.

Michigan's system incorrectly steered people with disabilities into skimpier benefits or rejected their coverage entirely, according to the investigation. At least 25 states have hired the consulting giant to build or run computer systems that control access to safety net programmes.

The findings land as states race to reprogram those same systems for millions of new work requirement checks required under President Donald Trump's One Big Beautiful Bill Act, changes projected to strip Medicaid from roughly 7.5 million people by 2034.

'I Just Wanted To Give Up'

Marie Noon, a 48-year-old former bank manager from Brighton, Michigan, was denied coverage in 2025 despite qualifying through a programme for disabled adults who work. The state's Bridges system failed to register her disability and applied the wrong income formula, according to disability rights attorney Anastassia Kolosova.

Noon takes eight medications a day to manage adult-onset Still's disease, a rare inflammatory condition. Without coverage, she paid hundreds of dollars out of pocket while fighting the decision for months.

'I can't tell you how many times I just wanted to give up,' Noon said. The state approved her benefits in January.

Kolosova, who works with Disability Rights Michigan, said the state already held all the information proving Noon's disability. Her organisation now receives two to three calls a month about similar denials. 'The system needs to work,' she said.

Failures Beyond Michigan

Court documents show similar breakdowns were central to a class-action lawsuit in Tennessee, where a federal judge ruled in 2024 that the state's Deloitte-built system violated federal law and the US Constitution. Deloitte, which was not named as a defendant, holds a Tennessee contract worth $1.12 billion (£834 million) over a decade.

In Texas, Lilly Livingston, a young woman with Down syndrome, was cut off from full Medicaid benefits in 2023 and wrongly enrolled in a limited women's health programme, according to her mother and a Disability Rights Texas attorney.

Millions of New Checks Ahead

Medicaid covers roughly 67 million low-income and disabled Americans, federal enrolment data shows. States must verify 80 hours of monthly work, study, or volunteering for adults covered through Medicaid expansion by 1 January 2027, and most plan to use existing vendors, with Deloitte the most common choice.

Twenty-five states and Washington DC sued the federal government in late June, arguing the law's narrow definition of 'medically frail' exemptions is unlawful. Advocates warn a single wrong database flag can decide whether a patient's monthly medication costs $50 (£37) or $500 (£372).

Deloitte Denies System Faults

Deloitte spokesperson Karen Walsh said the firm found 'no system anomalies causing routine denials of Medicaid for people with disabilities', adding that eligibility systems are owned by states and built to their specifications.

Michigan health department spokesperson Lynn Sutfin said the state is not aware of any widespread or systemic issues within Bridges, though records show the state asked Deloitte to modify the software in January 2025 following advocate complaints that eligible applicants were being funnelled into a restricted family planning plan.

For Noon, the reversal came only after repeated appeals and cash payments for her prescriptions. 'I literally cried,' she said. 'It was a really big deal.'