AMERIGROUP Announces Preliminary Third Quart...( VIRGINIA BEACH Va. Oct. 26 /- AMERI...),Health

VIRGINIA BEACH, Va., Oct. 26 /PRNewswire-FirstCall/ -- AMERIGROUP Corporation (NYSE: AGP) announced today that it expects to report earnings for the third quarter of 2009 in the range of $0.42 to $0.44 per diluted share. The new guidance for the third quarter primarily reflects elevated medical costs associated with the onset of a severe flu season due to the H1N1 virus.

Based on claims paid data through the month of September, the Company now estimates medical costs incurred in the quarter will be above its expectations, due largely to a significant spike in flu related activity which is most pronounced in September. As health officials have noted, the H1N1 virus is particularly virulent among children, pregnant women and other high-risk population groups, and this demographic represents approximately 87% of the Company's 1.7 million members.

In contrast to elevated medical costs in the third quarter, the Company's previously established reserves for medical costs as of June 30, 2009 continue to appear adequate.

The Company currently believes that it will not meet its previously announced 2009 annual earnings guidance of $2.55 to $2.75 per diluted share. The Company is withdrawing its guidance for the current year due to the wide range of medical cost outcomes that may occur in the fourth quarter.

"In September, we experienced a spike in flu-related activity among our Medicaid members," said James G. Carlson, AMERIGROUP Chairman and Chief Executive Officer. "The vast majority of our members are within the demographic most at risk for the flu and we appear to be early in the cycle. With this in mind, it is difficult to determine if, and when, the situation will abate, continue at current trends or worsen."

On October 24th, President Barack Obama signed an Emergency Declaration fo
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