Highmark, Pittsburgh, said it will phase out its HealthGuard of Lancaster HMO, which serves 92,000 members in central Pennsylvania, over the next 18 months. HealthGuard's board of directors decided to close the 20-year-old HMO after a market analysis projected dwindling demand for traditional managed care. "The reality is that market conditions and consumer preferences are changing," HealthGuard President Jim Godfrey said in a news release. "Managed-care products such as HMOs and (point-of-service) plans have been losing their popularity because many consumers believe it's important to have access to broad networks of providers." Highmark plans to launch two new PPO-based products in the area. HealthGuard lost $5.2 million on $148.1 million in revenue last year, according to data from the National Association of Insurance Commissioners. -- by Laura B. Benko
Pa. insurer gives up on HMO as demand declines
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