diff --git a/changelog_entry.yaml b/changelog_entry.yaml
index e69de29bb2d..c9aac242b98 100644
--- a/changelog_entry.yaml
+++ b/changelog_entry.yaml
@@ -0,0 +1,4 @@
+- bump: patch
+  changes:
+    fixed:
+    - Medicaid category precedence now follows covered.yaml order (pregnant/parent before expansion adult)
diff --git a/policyengine_us/tests/policy/baseline/gov/hhs/medicaid/costs/medicaid_cost_if_enrolled.yaml b/policyengine_us/tests/policy/baseline/gov/hhs/medicaid/costs/medicaid_cost_if_enrolled.yaml
index 49cf9f4a401..012a1d9833d 100644
--- a/policyengine_us/tests/policy/baseline/gov/hhs/medicaid/costs/medicaid_cost_if_enrolled.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/hhs/medicaid/costs/medicaid_cost_if_enrolled.yaml
@@ -74,6 +74,8 @@
     medicaid_cost_if_enrolled: 7_054
 
 - name: Multiple people in recent expansion state
+  # person1 (age 25 with child) is categorized as PARENT (NON_EXPANSION_ADULT)
+  # not EXPANSION_ADULT because parent takes precedence per covered.yaml
   period: 2024
   absolute_error_margin: 0.1
   input:
@@ -87,5 +89,5 @@
         employment_income: 0
       person2:
         age: 2
-  output: 
-    medicaid_cost_if_enrolled: [7_054, 2_867.7]
+  output:
+    medicaid_cost_if_enrolled: [4_631.1, 2_867.8]
diff --git a/policyengine_us/tests/policy/baseline/gov/hhs/medicaid/costs/medicaid_group.yaml b/policyengine_us/tests/policy/baseline/gov/hhs/medicaid/costs/medicaid_group.yaml
new file mode 100644
index 00000000000..d9941ca72b6
--- /dev/null
+++ b/policyengine_us/tests/policy/baseline/gov/hhs/medicaid/costs/medicaid_group.yaml
@@ -0,0 +1,55 @@
+# Test: Pregnant person in Medicaid expansion state
+# Expected: Should be assigned NON_EXPANSION_ADULT, not EXPANSION_ADULT
+# Reasoning: Pregnancy Medicaid should take precedence over expansion adult
+# per the parameter file covered.yaml which lists is_pregnant_for_medicaid first
+
+- name: Pregnant person in expansion state gets pregnancy Medicaid (not expansion)
+  period: 2024
+  input:
+    households:
+      household:
+        state_code: CA  # California has Medicaid expansion
+        members: [person]
+    people:
+      person:
+        age: 30
+        is_pregnant: true
+        is_pregnant_for_medicaid: true
+        is_medicaid_eligible: true
+  output:
+    medicaid_category: PREGNANT
+    medicaid_group: NON_EXPANSION_ADULT
+
+- name: Non-pregnant adult in expansion state gets expansion Medicaid
+  period: 2024
+  input:
+    households:
+      household:
+        state_code: CA  # California has Medicaid expansion
+        members: [person]
+    people:
+      person:
+        age: 30
+        is_pregnant: false
+        is_adult_for_medicaid: true
+        is_medicaid_eligible: true
+  output:
+    medicaid_category: ADULT
+    medicaid_group: EXPANSION_ADULT
+
+- name: Pregnant person in non-expansion state still gets pregnancy Medicaid
+  period: 2024
+  input:
+    households:
+      household:
+        state_code: TX  # Texas does not have Medicaid expansion
+        members: [person]
+    people:
+      person:
+        age: 30
+        is_pregnant: true
+        is_pregnant_for_medicaid: true
+        is_medicaid_eligible: true
+  output:
+    medicaid_category: PREGNANT
+    medicaid_group: NON_EXPANSION_ADULT
diff --git a/policyengine_us/variables/gov/hhs/medicaid/eligibility/categories/medicaid_category.py b/policyengine_us/variables/gov/hhs/medicaid/eligibility/categories/medicaid_category.py
index 5d99cbfea76..9f830b23d28 100644
--- a/policyengine_us/variables/gov/hhs/medicaid/eligibility/categories/medicaid_category.py
+++ b/policyengine_us/variables/gov/hhs/medicaid/eligibility/categories/medicaid_category.py
@@ -11,7 +11,7 @@ class MedicaidCategory(Enum):
     PARENT = "Parent"
     PREGNANT = "Pregnant"
     SSI_RECIPIENT = "SSI recipient"
-    SENIOR_OR_DISABLED = " Senior or disabled"
+    SENIOR_OR_DISABLED = "Senior or disabled"
     NONE = "None"
 
 
@@ -40,20 +40,15 @@ def formula(person, period, parameters):
             is_optional_senior_or_disabled_for_medicaid=MedicaidCategory.SENIOR_OR_DISABLED,
         )
 
-        # Ensure parametric reforms to the list of categories prevent those
-        # categories from being selected.
-
-        variable_to_category = {
-            name: category
-            for name, category in variable_to_category.items()
-            if name in categories
-        }
+        # Iterate in the order defined by the parameter file (covered.yaml)
+        # to ensure correct precedence (e.g., pregnant before expansion adult)
+        ordered_variables = [
+            name for name in categories if name in variable_to_category
+        ]
 
         return select(
-            [
-                person(variable, period)
-                for variable in variable_to_category.keys()
-            ]
+            [person(variable, period) for variable in ordered_variables]
             + [True],
-            list(variable_to_category.values()) + [MedicaidCategory.NONE],
+            [variable_to_category[variable] for variable in ordered_variables]
+            + [MedicaidCategory.NONE],
         )