Wells Fargo: Quarterly enrollment in the U.S. Medicaid program decreased by 2%

Investing.com — A report by a Wells Fargo analyst states that total Medicaid enrollment in the first quarter is expected to decrease by 2% quarter-over-quarter, including approximately a 1% decline in enrollment in the expansion program in California.

Tracking data from Wells Fargo’s state Medicaid enrollment shows that the monthly declines in January, February, and March are 0.8%, 0.7%, and 0.5%, respectively. The quarterly decline in California is expected to be 3%, while the decline in Q4 2025 is 1.3%.

Wells Fargo states that stricter eligibility verification checks implemented before the OBBBA policy changes have caused the Medicaid risk pool to continue deteriorating in 2025. The bank notes that the decline in enrollment—particularly declines driven by eligibility verification rather than potential macroeconomic changes—is highly correlated with increased severity.

Wells Fargo reports that enrollment in the expansion program decreased by 1% in the first quarter, which is below the 2025 average quarterly decline of 1.5%.

A new Urban Institute study on Medicaid work requirements and the six-month redetermination process indicates that potential enrollment losses could range from 4.9 million to 10.1 million. Compared to previous research, this range is broader; earlier estimates typically ranged from 5 million to 7 million.

A Wells Fargo analyst explains that the key factors behind the differences in scale include: the earlier proposals expanding the Medicaid eligibility age range starting at a larger point than the final range under OBBBA, the increase in the six-month redetermination process, and scenarios assuming non-response rates higher than those in historical work requirement attempts.

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