As a former boom state in the midst of the bust, Arizona's healthcare economy is taking a bigger hit than other areas of the country. One plan is a likely acquisition target. While the biggest insurers kept premium increases around medical trend-from 10 percent to 12 percent-for this year, increases are expected to be much higher for 2010. Hospitals are taking the brunt of state government cuts, passing on costs to health plans and other private payers as a way to make up for rising costs from uncompensated care.

Medicare Advantage plans are still strong in the state, with HMOs by far the top choice. Even as Medicare HMOs continue to grow, the state is seeing major declines for commercial HMOs as employers turn to high-deductible PPOs.

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