02Industries
The systems where this work matters most.
We work narrow on purpose. Benefits-decisioning systems share a small set of failure modes that pre-date AI and persist regardless of vendor. We’ve published our take on four of them in depth.
01Market scale
Where the dollars are. Where the growth is.
Each segment below has its own dynamics — but they share the trait that the underlying program dollars dwarf the modernization budget. Detection, decisioning, and governance investments compound across the program spend.
Total Addressable Market
$5.6T
Program dollars in scope
Serviceable Addressable Market
$35.0B
Annual modernization + advisory spend
Weighted CAGR (5-yr SAM)
8.1%
Across all four segments
Market segments — annual scale
TAM (program dollars) vs SAM (services spend) vs SOM (3-yr Vardr-obtainable). Log scale.
State Medicaid
CAGR 6.2%
Federal Civilian
CAGR 8.5%
State Tax & Revenue
CAGR 7.2%
Program Integrity & OIG
CAGR 9.4%
5-year SAM growth projection
Compounded at each segment's rolling-5yr CAGR. Hover a segment to highlight.
Sources: CMS NHE, OMB historicals, GAO improper-payment series, FTA state collections. Order-of-magnitude estimates; full methodology on hover per segment.
02Industry briefs
Where Vardr's methodology applies most directly.
State Medicaid
Medicaid eligibility systems that stop ejecting people who qualify.
More than 14% of state Medicaid disenrollments in recent renewal cycles have been administrative — paperwork failures, not eligibility losses. The eligibility engine itself is rarely the cause.
- Annual Medicaid spend
- $870B+
- Eligibility re-determinations
- 94M / yr
- Admin-disenrollment share
- ≈ 14–28%
Federal Civilian
Federal benefits systems that survive their first OIG review.
Federal civilian programs deliver hundreds of billions of dollars in benefits each year through decisioning systems that were not designed to be audited at the granularity OMB now requires. M-24-10, M-25-21, and the OIG community have shifted what counts as defensible.
- Annual federal benefits
- $3.4T+
- M-24-10 minimum practices
- Multiple
- Improper-payment exposure
- $200B+ / yr
State Tax & Revenue
Refund-fraud defense and revenue-system modernization that pay for themselves.
State tax agencies are the largest revenue-side IT systems most state IT shops operate. They also sit at the largest fraud surface — refund-fraud rings, false-filing schemes, and identity-theft refund attacks have cost states billions over the last decade.
- Annual state tax collections
- $1.1T+
- Refund fraud — annual loss
- $1–3B
- Identity-theft refund attempts
- millions / yr
Program Integrity & OIG
Detection, prevention, and recovery built into the operating model — not bolted on.
Program-integrity and Inspector General offices were designed for a post-payment world: detect the improper payment, claw it back, report the aggregate. Contemporary improper-payment defense moves earlier in the lifecycle — at intake, at adjudication, at provider enrollment.
- Federal improper payments — annual
- $233B+
- Investigator caseload per FTE
- 200–1,000 active
- Recovery vs. prevention ratio
- Heavily recovery
Working in a program we haven't written about yet?
45-minute principal-level briefing. We've worked across the civilian benefits universe — if it's not on this page, ask.