1064863--2/24/2009--AMERIGROUP

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{regulation, government, change}

{debt, indebtedness, cash}

{acquisition, growth, future}

{cost, contract, operation}

{loan, real, estate}

{condition, economic, financial}

{capital, credit, financial}

{financial, litigation, operation}

{product, market, service}

{regulation, change, law}

{product, liability, claim}

Changes in the number of Medicaid eligible beneficiaries, or benefits provided to Medicaid eligible beneficiaries or a change in mix of Medicaid eligible beneficiaries could cause our operating results to suffer. Receipt of inadequate or significantly delayed premiums would negatively impact our revenues, profitability and cash flows. As participants in state and Federal healthcare programs, we are subject to extensive fraud and abuse laws which may give rise to frequent lawsuits and claims against us, and the outcome of these lawsuits and claims may have a material adverse effect on our financial position, results of operations and liquidity. Failure to comply with the terms of our government contracts could negatively impact our profitability and subject us to fines, penalties and liquidated damages. Changes in Medicaid or Medicare funding by the Federal government or the states could substantially reduce our profitability. If state governments do not renew our contracts on favorable terms or we fail to retain our contracts as a result of a re-bidding process, our business and results of operations will suffer. Delays in program expansions or contract changes could negatively impact our business. If a state fails to renew its Federal waiver application for mandated Medicaid enrollment into managed care or such application is denied, our membership in that state will likely decrease. We rely on the accuracy of eligibility lists provided by state governments, and in the case of our Medicare Advantage members, by the Federal government. Inaccuracies in those lists would negatively affect our results of operations. Our inability to operate new business opportunities at underwritten levels could have a material adverse effect on our business. Our inability to maintain good relations with providers could harm our profitability or subject us to material fines, penalties or sanctions. Our inability to integrate, manage and grow our information systems effectively could disrupt our operations. Failure of a business in a new state or market would negatively impact our results of operations. Difficulties in executing our acquisition strategy or integrating acquired business could adversely affect our business. We are subject to competition that impacts our ability to increase our penetration of the markets that we serve. Negative publicity regarding the managed care industry may harm our business and operating results. We may be subject to claims relating to medical malpractice, which could cause us to incur significant expenses. Risks related to being a regulated entity Changes in government regulations designed to protect providers and members could force us to change how we operate and could harm our business and results of operations. Regulations could limit our profits as a percentage of revenues. Changes in healthcare laws could reduce our profitability. If state regulators do not approve payments of dividends, distributions or administrative fees by our subsidiaries to us, it could negatively affect our business strategy and liquidity. If state regulatory agencies require a statutory capital level higher than the state regulations we may be required to make additional capital contributions. Failure to comply with government laws and regulations could subject us to civil and criminal penalties and limitations on our profitability. Compliance with the terms and conditions of our Corporate Integrity Agreement requires significant resources and, if we fail to comply, we could be subject to penalties or excluded from participation in government healthcare programs, which could seriously harm our results of operations, liquidity and financial results. Risks related to our financial condition Ineffective management of rapid growth or our inability to grow could negatively affect our results of operations, financial condition and business. Restrictions and covenants in our credit agreement could limit our ability to take certain actions causing our operational and financial flexibility to be negatively impacted. Our debt service obligations may adversely affect our cash flows and our increased leverage as a result of our 2.0% Convertible Senior Notes and Credit Agreement may harm our financial condition and results of operations. Changes in accounting may affect our results of operations. Our investments in auction rate securities are subject to risks that may cause losses and have a material adverse effect on our liquidity. Our investment portfolio may suffer losses from reductions in market interest rates and fluctuations in fixed income securities which could materially adversely affect our results of operations or liquidity. The value of our investments is influenced by varying economic and market conditions, and a decrease in value could have an adverse effect on our results of operations, liquidity and financial condition. Adverse credit market conditions may have a material adverse affect on our liquidity or our ability to obtain credit on acceptable terms.

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1064863--2/24/2009--AMERIGROUP_CORP