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 health care 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.” 

Sens. Ron Wyden, (D-Ore.), Elizabeth Warren, (D-Mass.), and Raphael Warnock, (D-Ga.), today released an interim report on five tech companies that contract with state Medicaid programs. Those companies—Maximus, Gainwell, General Dynamics, Conduent, and Deloitte—now stand to make millions of dollars implementing Medicaid work requirements, the report finds, under which millions of Americans are likely to lose their health insurance.

In June, the Centers for Medicare and Medicaid Services released its interim final rule on Medicaid work requirements, mandating that “medically frail” Medicaid patients regularly prove they are unable to work full-time, even if they have already been diagnosed with a debilitating condition and were previously enrolled in Medicaid. Able-bodied recipients under 64 will have to prove at least 80 hours a month of work or other qualifying activities to avoid losing their coverage. 

The new federal Medicaid work requirements are being implemented as part of President Donald Trump’s “One Big Beautiful Bill,” a budget and spending bill granting tax breaks to the nation’s wealthiest people while cutting almost a trillion dollars from Medicaid’s budget over the next decade. The changes are scheduled to go into effect on January 1, despite a 25-state lawsuit filed in an attempt to block the Medicaid changes.

In response to a request for comment, a Centers for Medicare and Medicaid Services spokesperson said that the agency “is committed to ensuring eligible people can access and maintain Medicaid coverage and that federal investments support accurate, timely eligibility decisions and processes.” 

The Congressional Budget Office predicts that about 7.5 million people will lose their health care coverage by 2034 under the new eligibility rules—and at least 2.6 million of those people will lose coverage not because they are ineligible, but because the verification process will be too difficult for them to navigate. 

“These are not people who failed to qualify—they are eligible Americans who will be stripped of coverage because they could not navigate a system designed to pile on paperwork, not to protect care,” the senators wrote in their report.

They pointed to the state of Georgia as a cautionary tale. In 2023, Georgia implemented state-level Medicaid work requirement rules. Two years later, “approximately 8,077 Georgians were actively enrolled” in Medicaid—or only about 7 percent of the state’s eligible population of uninsured and low-income adults.

And the program was expensive: its administrative costs totaled about $54 million, more than double the $26 million spent on actually insuring enrolled Georgians. Beyond that, $27 million went to consultants to set it up; Deloitte, one of the five companies mentioned in the Senate Finance Committee members’ report, was the primary contractor responsible for implementing Georgia’s Medicaid eligibility system. 

“When Arkansas attempted to implement Medicaid work reporting requirements in 2018, 17,000 people lost coverage in four months because they lacked internet access, never received notices, or could not navigate a glitchy website,” the senators wrote. “Michigan paused similar plans after projecting that 80,000 enrollees, fully one third of program participants, would lose coverage.” 

The health tech firm Gainwell Technologies, owned by Veritas Capital, also contracts with states seeking to determine Medicaid eligibility; it contracts to provide Medicaid-related IT services, including Medicaid claims processing services, to at least 43 state governments. In October of 2025, according to its website, Gainwell launched a “work requirements verification solution” product. 

But like Deloitte, Gainwell’s government contracts faced scrutiny even before they were named in Tuesday’s report. In a 2025 audit, the New York State Comptroller’s office found that a Gainwell subsidiary had failed to bill about $52.2 million to private insurance companies—and the state’s Medicaid budget ended up footing the bill.

Matt Parr, of the Private Equity Stakeholder Project, a nonprofit watchdog group, said his organization’s research found “alleged problems with fraud detection, payment delays, and other system failures” across Gainwell’s government contracts. 

“With Gainwell and other contractors now positioned to receive more public money to carry out new Medicaid requirements, lawmakers should be looking at who owns these companies, how their acquisitions are financed, and whether financial pressures are affecting their work,” Parr said. “The pressure to cut costs and increase profits can be especially harmful when mistakes and system failures may cause someone to lose their health care coverage.”

The companies investigated by the Senate committee members said they were not evaluated on the basis of maximizing denials, but the report notes that “no vendor provided their contracts to the committee to demonstrate whether they contain adequate incentives for error-free administrative support.”

Some lawmakers have questioned whether Medicaid work requirements—which are billed as a cost-saving measure—will save money in the long run. “The reason [OBBBA] saves money on Medicaid is because they know we’ll be kicking people off health care…And when people don’t have health care coverage, they will come in sicker, and they’ll come in later,” Minnesota State Sen. Matt Klein said. “Hospitals will be burdened with caring for them, regardless, and they’ll be uncompensated.”

This post was shared from Mother Jones.