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Providence Service Corporation Provides Update on Potential Medicaid
Date:1/15/2009

Stimulus Package and House Vote to Expand Child Health Insurance

TUCSON, Ariz., Jan. 15 /PRNewswire-FirstCall/ -- The Providence Service Corporation (Nasdaq: PRSC) today provided an update on recent discussions in Washington D.C. on an economic stimulus package being sought by President-elect Barack Obama as well as the recent House of Representatives vote to expand child health insurance.

The economic stimulus package under discussion includes aid to state and local governments as well as money to be set aside for Medicaid to help protect vital services like education and health care from damaging cuts. While formal discussion in the House and Senate would not begin until after Mr. Obama takes office on January 20, initial indications are that the total stimulus package could now approach $800 billion, with more than $160 billion in federal aid for state and local governments, of which $87 billion would be set aside for Medicaid.

"A Medicaid stimulus package could certainly provide our state government payers much needed fiscal help," said Fletcher McCusker, CEO. "This should translate to added funding for many of the services we provide, stemming some of the negative effects we have experienced over the last six months as a result of state government budgetary constraints. Given the continuing weak economic environment, the Medicaid population is expected to reach record levels making federal aid even more critical if states are expected to adequately service this population. While the federal government is expected to step in to help, as they did in 2003, timing and passage of this stimulus package still remain uncertain."

If additional Medicaid funding is approved, the funds are expected to be allocated based on states' Medicaid enrollment levels as stated by CMS. Assum
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SOURCE Providence Service Corporation
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