Private Health Insurance: Enrollment Remains Concentrated among Few Issuers, including in Exchanges

A highly concentrated health insurance market may indicate less competition and could affect consumers' choice of issuers and the premiums they pay. In 2014, PPACA required the establishment of health insurance exchanges—a new type of marketplace where individuals and small groups can compare and select among insurance plans sold by participating issuers—and the introduction of other reforms that could affect market concentration and competition among issuers. GAO previously reported that enrollment through these newly established exchanges was also generally concentrated.

PPACA included a provision for GAO to study market concentration. This report describes changes in the concentration of enrollment among issuers in (1) overall individual, small group, and large group markets, and (2) individual and small group exchanges.

GAO determined market share in the overall markets using enrollment data from 2015 and 2016 that issuers are required to report annually to the Centers for Medicare & Medicaid Services (CMS) and compared that data to 2011 through 2014 enrollment data GAO analyzed in previous reports. GAO determined market share in the exchanges from 2015 through 2017 using other sources of enrollment data from CMS and states. For all data sets, GAO used the most recent data available.

Enrollment in private health insurance plans continued to be concentrated among a small number of issuers in 2015 and 2016. In the overall large group market (coverage offered by large employers), small group market (coverage offered by small employers), and individual market (coverage sold directly to individuals), the three largest issuers held 80 percent of the market or more in at least 37 of 51 states. This is similar to what GAO previously reported for 2011 through 2014.

GAO also found that within the overall individual and small group markets in each state, the health insurance exchanges established by the Patient Protection and Affordable Care Act (PPACA) were also concentrated from 2015 to 2017.

For the individual market exchanges, in each year, three or fewer issuers held 80 percent or more of the market, on average, in at least 46 of the 49 state exchanges for which GAO had data. Further, the largest issuers increased their market share in about two-thirds of exchanges. The number of issuers participating in a market and their market shares can affect concentration, and many individual exchanges generally had a decreasing number of participating issuers over time.

For the small group market exchanges, in each year, three or fewer issuers held 80 percent or more of the market in at least 42 of the 46 state exchanges for which GAO had data. The small group exchanges also had slight changes in issuer participation and market share over this time period.

GAO received technical comments on a draft of this report from the Department of Health and Human Services and incorporated them as appropriate.

Historically, the market for health insurance sold by private issuers has  been highly concentrated—that is, a small number of issuers in the  market enrolled most of the people in that market. We previously  reported that, from 2010 through 2013, enrollment in most states was  concentrated among the largest issuers in each of the three types of  health insurance markets: the large group market (coverage offered by  large employers), the small group market (coverage offered by small  employers), and the individual market (consisting mainly of coverage sold  directly to individual consumers who lack access to group coverage). We  also reported that these trends continued in 2014, which was the first year  in which a number of provisions from the Patient Protection and  Affordable Care Act (PPACA) took effect. For example, we found that  enrollment was similarly concentrated among a small number of issuers  during the first year of operation of the health insurance exchanges that  were created under PPACA. Health insurance exchanges are markets  that operate within each state’s overall individual and small group market  where eligible individuals and small employers can compare and select  among qualified insurance plans offered by participating issuers. A highly  concentrated insurance market may indicate less competition and could  affect consumers’ choice of issuers and the premiums they pay.

PPACA also included a provision for us to conduct a study on competition  and concentration in health insurance markets. For the current study, we  describe changes in the concentration of enrollment among issuers in  each state’s:  1.  overall individual health insurance market, including the individual  2.  overall small group health insurance market, including the small group  3.  overall large group health insurance market.

To analyze changes in concentration in the overall individual, small group,  and large group markets in each state, we analyzed 2015 and 2016  Medical Loss Ratio data that PPACA requires issuers to report annually  to the Department of Health and Human Services’ (HHS) Centers for  Medicare & Medicaid Services (CMS). Data for 2016 were the most  recently available at the time of our analysis. We previously analyzed  2011 through 2014 data from this same source in our prior reports on  concentration; we present that information alongside our new analyses in  this report. Within the overall individual, small group, and large group  markets for each of the 51 states, we determined the state-level market  share for each issuer by calculating the ratio of the total number of  covered life-years for each issuer in a state to the total number of covered  life-years in that state.

To analyze changes in concentration in the individual market exchanges,  we obtained data from CMS and states for 2015, 2016, and 2017, the  most recently available at the time of our analyses. CMS operated  individual market exchanges—referred to as federally facilitated  exchanges—in about three-quarters of states. For these states, CMS  provided us with data from its data warehouse, the Multidimensional  Insurance Data Analytics System, for each enrollee who obtained health  insurance coverage through federally facilitated exchanges for 2015,  2016, or 2017. These data included, among other information, the  enrollees’ coverage start and end dates, the issuers from which the  enrollees purchased coverage, and the states and rating areas— geographic areas established by states and used, in part, by issuers to  set premium rates—in which the enrollees lived. For the remaining  states, which operated their own individual market exchanges, each state  generally provided us with comparable enrollment data by rating area.  We used the CMS and state data to calculate the total number of issuers  that participated in each state and rating area, as well as each issuer’s  market share—measured using covered life-years—within the state and  each rating area. Rating areas represent defined localized markets within  a state and issuer participation can vary across rating areas. Market  concentration can vary by rating area and the largest issuer in the state  may not be the largest issuer in every rating area. To account for this  variability, for our analyses of the number of issuers and issuer market  share in each state’s individual market exchange, we calculated averages  across rating areas that were weighted for differences in the size of total  enrollment in each rating area. For example, to obtain the average market  share of the largest issuer in a state’s rating areas, we calculated the  market share of the largest issuer in each rating area in the state and  then calculated the average of those market shares, weighted by the  number of covered life-years in each rating area.

To analyze changes in concentration in the small group exchanges— referred to as the Small Business Health Options Program (SHOP)—we  obtained data from CMS and states for 2015, 2016, and 2017, the most  recently available at the time of our analyses. CMS provided enrollment  data from its SHOP Enrollment Database for states that utilized federally  facilitated SHOP exchanges operated by CMS—about two-thirds of  states. These data included, among other information, the coverage  start and end date for each enrollee and the issuers from which the  enrollees purchased coverage. Each of the remaining states operating its  own exchange provided us with enrollment data for each exchange  issuer. We used the CMS and state data to calculate the number of  issuers that participated in each state, as well as the state-level market  share of each participating issuer, for each year from 2015 through 2017.  SHOP exchange enrollment data at the rating area level were generally  not available.

For each state’s overall markets and exchanges, we counted issuers as  participating in a market if they had enrollment in that market; we did not  count issuers as participating if they offered coverage in a market, but did  not have any enrollment. Because there can be multiple issuers within a  market that share a single parent company, we aggregated such issuers  to the parent company level; if there was no parent company, we  analyzed the data by the individual issuers. We did this to more fully  account for the portion of the market held by each parent company. We  calculated the three-firm concentration ratio—the combined shares of  covered life-years for the three largest issuers in that market—and the  market share of the single largest issuer in that market. We considered  states’ overall markets or exchanges to be highly concentrated if three or  fewer issuers held at least 80 percent of the market share. Finally, while  states may have multiple local markets with differing concentrations of  enrollees among health issuers, the data we used to measure  concentration were generally limited to enrollment at the state level, with  the exception of our individual exchange enrollment data—thus  precluding our ability to measure concentration within local markets  except for the individual market exchanges. For all other markets, we  present state-wide issuer market share, although issuers may not have all  participated across the entire state.

We analyzed enrollment data from all of our sources as they were  reported by issuers to CMS or states. We did not otherwise independently  verify the accuracy or completeness of the information with the issuers.  We assessed the reliability of the CMS and state data in several ways,  including through discussions with CMS and state officials, reviewing  relevant data manuals and other documentation, performing electronic  tests of the data to identify any outliers or anomalies, and comparing the  data with data from published sources. We determined that the data were  sufficiently reliable for the purposes of our reporting objectives.

We conducted this performance audit from November 2017 to March  2019 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

Private health insurance is the leading source of health coverage in the  United States. Small and large employers may offer fully insured group  plans (by purchasing coverage from an issuer) or self-funded group plans  (by setting aside funds to pay for employee health care). Most small  employers purchase fully insured plans, while most large employers self- fund at least some of their employee health benefits. While the majority of  health insurance coverage is provided through the small or large group  market, Americans without access to group health coverage, such as  those with employers that do not offer health coverage, may choose to  purchase it directly from an issuer through the individual market. (See fig.  1 for total covered life-years reported by issuers to CMS in the individual  and fully insured small and large group markets.)

We previously identified several factors that can affect concentration in  health insurance markets. High concentration levels have often been  the result of consolidation—mergers and acquisitions—among existing  issuers. In addition, concentration can persist because of the difficulty for  new issuers to enter the market. For example, new issuers that do not yet  have large numbers of enrollees may have greater challenges negotiating  discounts with health care providers.

PPACA contains provisions that may affect market concentration and  competition among health issuers, such as the establishment of health  insurance exchanges within each state’s overall individual and small  group markets. One goal of the exchanges is for issuers to have an  incentive to compete with one another on price and value because  consumers can visit a website to compare and select among health plans  participating in the exchanges. Issuer participation in the exchanges is a  key factor in assuring that consumers have a choice of health plans.  While PPACA does not require issuers offering coverage in an overall  market to participate in the exchanges, issuers have an incentive to do so  in order to access additional consumers. For example, certain consumers  earning from 100 to 400 percent of the federal poverty level are eligible to  receive premium tax credits that can reduce premium costs, but only for  plans purchased through an exchange. The federal government and  some states have also instituted other provisions to encourage issuers to  participate in the exchanges. For example, PPACA required the establishment of the Consumer Oriented and Operated Plan (CO-OP)  program, which provided loans to new consumer-governed, nonprofit  issuers that are required to offer health plans in the individual and small  group exchanges. In addition, in Maryland, certain issuers that offered  plans outside of the exchange are also required to offer plans through the  exchange. PPACA also established other key market reforms that apply  both within and outside of the exchanges, such as requiring that issuers  offer coverage to all individuals regardless of health status and limiting  the ability of issuers to deny coverage or charge higher premiums to  individuals and small groups based on health risks or certain other  factors. Since the enactment of PPACA in 2010, there have been  additional federal policy changes that may influence an issuer’s decision  about whether to participate in health insurance markets. For example, in  2014, HHS announced that a program that made payments to issuers  whose losses exceeded a certain threshold—known as risk corridor  payments—would be budget neutral, which resulted in reduced payments  for some issuers. One issuer told us that this lower than expected  funding was one of multiple factors that contributed to its decision to  reduce the number of insurance markets in which it participated.

Overall Individual Health Insurance Markets and Exchanges Generally Remained Concentrated in Recent Years, with Increasing Concentration in Many States’ Exchanges Overall Individual Health Insurance Markets Generally Remained Concentrated in Recent Years

States’ overall individual health insurance markets were generally  concentrated in 2015 and 2016, similar to what we reported for previous  years. Individual market exchanges—representing 57 percent of the  overall individual market nationally in 2016—were also concentrated in  most states and in many cases became more concentrated in recent  years.

States’ overall individual health insurance markets were generally  concentrated among a small number of issuers in 2015 and 2016. On  average, there were 16 issuers participating in each state in 2016.  However, that same year, the 3 largest issuers cumulatively held 80  percent or more of the market—an indicator of high concentration—in 37  of 51 states, generally consistent with what we previously reported for  years 2011 through 2014 (see fig. 2). The remaining issuers in each  state often had significantly smaller market shares—on average, 12 of the  16 issuers in each state held less than 5 percent market share.

We also found that in over half of states in 2016, a single issuer held at  least 50 percent of the market, consistent with prior years. Specifically, a  single issuer held at least 50 percent market share in 28 states in 2016.  Of these states, a single issuer held between 80 and 90 percent market  share in 5 states, and more than 90 percent market share in 2 states. For  example, although West Virginia had 15 issuers in 2016, a single issuer,  Highmark, held 91 percent market share. This largest issuer position was  held by the same company in both 2015 and 2016 in 45 states; in 35 of  these states, the largest issuer had been the same since 2011.

While states’ overall individual markets generally remained concentrated,  they experienced fluctuations in the extent of concentration in recent  years. Specifically, from 2014—the last year of data on which we  previously reported—to 2016, the market share of the three largest  issuers increased in 30 states (with a median increase of 4 percentage  points) and decreased in 21 states (with a median decrease of 6  percentage points). (See fig. 3.) However, despite these changes, states  that were highly concentrated in 2014—that is, where the market share of  the three largest issuers was at least 80 percent—generally remained  highly concentrated in 2016.

States’ Individual Market Exchanges Were Generally Concentrated, and Many Became More Concentrated from 2015 to 2017

Our analyses found that states’ individual market exchanges—collectively  representing 57 percent of enrollment in the overall individual market  nationally in 2016—were generally concentrated among a small number  of issuers from 2015 to 2017. Each year during this time period, for the  49 states for which we had complete data, on average, between 3 and 5  issuers participated in the individual market exchanges across the states’  rating areas. Further, each year, the three largest issuers held 80  percent or more of the exchange market, on average, across the states’  rating areas, in at least 46 states. For example, in Wisconsin in 2017, the  market share of the three largest issuers ranged from 75 percent in 2 of  the state’s 16 rating areas to 100 percent in 6 rating areas; on average,  the three largest issuers held 92 percent market share across the 16  rating areas.

While the number of states meeting this 80 percent average threshold for  high concentration remained relatively constant from 2015 through 2017,  market share was increasingly concentrated among a smaller number of  issuers in many states, as fewer issuers participated in the exchanges by 2017. The number of states with three or fewer issuers, on average, in  their rating areas—and where the issuers therefore held, on average, 100  percent or nearly 100 percent market share—increased from 16 states in  2015 to 32 states in 2017. (See fig. 4.)

Further, we found that in at least 35 states each year from 2015 through  2017, the average market share of the largest individual market exchange  issuer across the states’ rating areas was at least 50 percent. For  example, although Kansas had up to three participating exchange issuers  in each of its rating areas in 2017, the largest issuer in each rating area— generally Blue Cross and Blue Shield of Kansas—had at least 88 percent  market share.

We also found that many states’ individual market exchanges became  more concentrated from 2015 to 2017. In 32 of the 49 states, the average  market share of the largest exchange issuer across the states’ rating  areas increased between 2015 and 2017, with a median increase of 13  percentage points. (See fig. 5.) For example:  In Arizona, the average market share of the largest exchange issuer  across the state’s rating areas increased by about 60 percentage  points, from 39 percent in 2015 to 98 percent in 2017. This increase  corresponded with a decrease in issuer participation in the exchange;  the state’s seven rating areas had between 7 and 12 issuers in 2015,  but by 2017 had only 1 or 2 issuers. In 2015, a CO-OP, Compass  Cooperative Health Plan, Inc., had 29 percent of the total exchange  market share statewide in Arizona and was among the largest issuers  in three rating areas, but it exited the exchange after that year.  Other, smaller issuers also exited the exchange after 2015 and 2016,  and, in 2017, Blue Cross Blue Shield of Arizona was left as the only  issuer in five of the state’s rating areas.

In South Carolina, the average market share of the largest exchange  issuer increased by 41 percentage points, from 59 percent in 2015 to  100 percent in 2017. As in Arizona, the increase corresponded with a  decrease in issuer participation in the exchange, from 2 to 4 issuers in  the state’s 46 rating areas in 2015 to only 1 issuer—BlueCross  BlueShield of South Carolina—in each rating area in 2017. In addition,  a CO-OP, Consumers’ Choice Health Insurance Company, had 43  percent of the total exchange market share statewide and was the  largest issuer in nearly half of the state’s rating areas in 2015, but it  exited the exchange after that year. In contrast, BlueCross BlueShield  of South Carolina had 42 percent of the total exchange market share  statewide and was the largest issuer in about half of the rating areas  in 2015, and by 2017 was the only remaining issuer in the state.

In the remaining 17 states, the average market share of the largest  exchange issuer across the states’ rating areas decreased between 2015  and 2017, with a median decrease of 12 percentage points. For example:  In Maine, the average market share of the largest exchange issuer  decreased by 39 percentage points, from 81 percent in 2015 to 42  percent in 2017. Maine Community Health Options, a CO-OP,  remained the largest issuer in each of the state’s four rating areas  during this period. However, the other two issuers in these rating  areas captured more market share. For instance, Harvard Pilgrim  Health Care Group had 1 percent or less market share in each rating  area in 2015, but as much as 32 percent market share in one of the  state’s rating areas in 2017.

In Delaware—which only had one rating area—the market share of  the largest exchange issuer decreased by 37 percentage points, from  92 percent in 2015 to 55 percent in 2017. Although the state had the  same two issuers, Aetna Group and Highmark Group, throughout this  time period—and Highmark Group was the largest issuer each year— Aetna Group’s market share increased from 8 percent in 2015 to 45  percent in 2017.

Overall Small Group Health Insurance Markets and Exchanges Generally Remained Concentrated in Recent Years The Overall Small Group Market Remained Concentrated in Recent Years

Our analyses found that the overall small group health insurance market  remained concentrated in recent years, similar to our prior report. Small  group exchanges often had low enrollment—typically less than 1 percent  of the overall small group market—and also remained concentrated in  recent years.

State small group health insurance markets were concentrated among a  small number of issuers in 2015 and 2016. On average, there were 8  issuers participating in each state in 2016. However, in that same year  the 3 largest issuers cumulatively held 80 percent or more of the  market—an indicator of high concentration—in about three-quarters of  states, generally consistent with what we previously reported for years  2011 through 2014 (see fig. 6). The remaining issuers in each state  often had significantly smaller market shares—on average, 5 of the 8  issuers in each state held less than 5 percent market share.

Further, we found that the largest issuers held 50 percent or more of the  market in 30 states in 2016. For example, though Louisiana had 6 issuers  in 2016, the largest issuer held 76 percent market share. Overall, a single  issuer held between 80 and 90 percent market share in 10 states, and  more than 90 percent market share in 1 state. This largest issuer position  was held by the same company in both 2015 and 2016 in 46 states; in 40  of these states, the largest issuer had been the same since 2011.

While states’ overall small group markets remained concentrated, they  experienced fluctuations in concentration in recent years. From 2014  through 2016, the market share of the 3 largest issuers increased in 35  states (with a median increase of 3 percentage points), remained the  same in 1 state, and decreased in 15 states (with a median decrease of 1  percentage point). (See fig. 7.) However, despite these changes, states  that were highly concentrated in 2014—that is, where the market share of  the three largest issuers was at least 80 percent—generally remained  highly concentrated in 2016.

Small Group Exchanges Were Concentrated in a Few Issuers between 2015 and 2017

Our analyses found that states’ SHOP exchanges remained concentrated  from 2015 to 2017, with only slight overall changes in issuer participation  or market share. Further, as a proportion of the overall small group  market, SHOP exchanges in most states had little enrollment. (See  sidebar.)

Small Group Health Options Program  (SHOP) Enrollment as a Proportion of the  Overall Small Group Market  As a proportion of the overall small group  market, SHOP exchanges in most states had  little enrollment—that is, typically less than 1  percent of the overall small group market. For  example, in 2016, Alaska’s small group  market had 17,257 covered life-years, while  its SHOP exchange had 96 covered life-years  (0.6 percent). The District of Columbia, Rhode  Island, and Vermont were the only states  where the SHOP exchange was more than 3  percent of the overall small group market. The  District of Columbia and Vermont require all  small group plans to be purchased through  the state’s SHOP exchange. (See app. III.)

In each year, more than 31 of the 46 states for which we had data had  three or fewer issuers in the SHOP exchange; therefore between one and  three issuers held 100 percent of the market share for the state. Among  states with four or more issuers, the market share of the three largest  issuers was typically at least 80 percent. For example, California had 6  participating issuers from 2015 through 2017 in the SHOP exchange, and  the market share for the three largest issuers in that state ranged from 92  to 93 percent across the 3 years. (See fig. 8.)

On average, the number of participating issuers in the SHOP exchange  decreased slightly from 2015 through 2017. However, in a few states,  there were larger changes in issuer participation and concentration. For  example, Ohio’s SHOP exchange had 7 participating issuers in 2015,  decreasing to 4 issuers in 2017. Across this time period, the market share  of the three largest issuers in Ohio’s SHOP exchange increased from 59  percent to 98 percent. Conversely, New York’s SHOP exchange had 10  issuers in 2015, decreasing to 8 issuers in 2017; but the market share of  the three largest issuers decreased by almost 7 percentage points within  that time.

Further, we found that in at least 38 of 46 states each year from 2015  through 2017, the largest issuer held at least 50 percent of the SHOP  exchange market share. In 23 states, the market share of the largest  issuer increased during this period, with a median increase of 11  percentage points, and in 6 additional states the largest issuer was the  only issuer in the SHOP exchange and thus held 100 percent market  share for all 3 years. (See fig. 9.) For example:  In Kentucky, the market share of the largest issuer in the SHOP  exchange increased by 56 percentage points, from 42 percent in 2015  to 98 percent in 2017. In 2015, the largest issuer was Kentucky Health  Cooperative, a CO-OP that exited the SHOP exchange after 2016.  The second largest issuer in 2015, Wellpoint Inc. Group, increased  market share over this time period, from 33 percent in 2015 to 98  percent in 2017, becoming the largest issuer. The market share of the  other remaining issuer in Kentucky’s SHOP exchange, Baptist Health  Plan, Inc., decreased from 19 percent in 2015 to 1 percent in 2017.

In Ohio, the market share of the largest issuer in the SHOP exchange  increased by 54 percentage points, from 29 percent in 2015 to 83  percent in 2017. Across this time period, the largest issuer changed  from Medical Mutual of Ohio (which had 29 percent market share in  2015 and 8 percent in 2017) to Wellpoint Inc. Group (which had 12  percent market share in 2015 and 83 percent in 2017). This increase  in the largest issuer’s market share corresponded with a decrease in  issuer participation. The state had 7 participating issuers in 2015,  decreasing to 4 in 2017. The market share of the 3 issuers that left  ranged from 9 to 16 percent.

In the remaining 17 states, the market share of the largest issuer  decreased between 2015 and 2017, with a median decrease of 7  percentage points. In some states, these decreases were significant. For  example, in Maine, the market share of the largest issuer, Maine  Community Health Options—a CO-OP—decreased by 40 percentage  points, from 89 percent in 2015 to 49 percent in 2017. During this time  period, while Maine Community Health Options remained the largest  issuer, the other two participating issuers gained additional market share.

For example, Harvard Pilgrim Health Care Group increased market share  from 6 percent in 2015 to 38 percent in 2017.

Overall Large Group Health Insurance Markets Remained Concentrated in Recent Years

In 2015 and 2016, states’ overall large group health insurance markets  remained concentrated, as in prior years. On average, there were 10  participating issuers in each state in 2016. However, in that same year  the 3 largest issuers held at least 80 percent market share in 43 of 51  states, which is generally consistent with prior years. (See fig. 10.) In  2016, 3 issuers held 99 or 100 percent of the large group market in 7  states—Alabama, Alaska, Mississippi, Nebraska, North Dakota, South  Carolina, and Vermont. The remaining issuers in each state often had  significantly smaller market shares—on average, 6 of the 10 participating  issuers in each state held less than 5 percent market share.

In more than 30 states in 2015 and 2016, market share was not only  concentrated among a small number of issuers, but a single issuer held at  least 50 percent of the overall large group market, as in prior years. A  single issuer held at least 50 percent market share in 33 states in 2016,  with significantly higher levels of concentration by the largest issuer in  some states. For example, in 2016, a single issuer held at least 90  percent of the market in Alabama and at least 80 percent of the market in  5 other states (Alaska, Mississippi, Montana, South Carolina, and  Vermont). Further, this largest issuer position was held by the same  company in 2015 and 2016 in 49 states; and, in 47 of those states, the  largest issuer position has been held by the same company since 2011.

The extent of concentration in the overall large group market remained  relatively constant when comparing 2014—the last year of data on which  we previously reported—to 2016. The market share of the 3 largest  issuers increased in 24 states and decreased in 24. (See fig. 11.) The  largest increase was in Wisconsin, where the market share of the 3  largest issuers increased from 38 percent in 2014 to 44 percent in 2016,  and the largest decrease was in New York, where the market share of the  3 largest issuers decreased from 55 percent in 2014 to 47 percent in  2016.

We provided a draft of this report to HHS for review and comment. The  department provided technical comments, which we incorporated as  appropriate.

We are sending copies of this report to the appropriate Congressional  committees, the Secretary of Health and Human Services, and other  interested parties. In addition, the report is available at no charge on the  GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-7114 or dickenj@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix IX.

Appendix I: Individual Market Health Insurance Exchange Enrollment as a Proportion of the Overall Market, 2016

This table presents covered life-years in each state’s individual market  health insurance exchange as a proportion of total covered life-years in  each state’s overall individual market in 2016.

Appendix II: Number and Market Share of Issuers in Each State’s Individual Market Health Insurance Exchange, 2015-2017

The four tables below present information on the number of participating  issuers and market share of the largest issuers in each state’s individual  market exchange from 2015 through 2017. Specifically, Table 2 presents  the total number of exchange issuers in each state. Table 3 presents the  average number of exchange issuers across each state’s rating areas.  Table 4 presents the names and market shares of the single largest  exchange issuer, and market share of the largest three issuers, for each  state. Table 5 presents the average market share of the largest issuer  across each state’s rating areas.

Appendix III: Small Group Health Insurance Exchange Enrollment as a Proportion of the Overall Market, 2016

This table presents covered life-years in each state’s Small Business  Health Options Program (SHOP) exchange as a proportion of total  covered life-years in each state’s overall small group market in 2016.

Appendix IV: Number and Market Share of Issuers in Each State’s Small Group Health Insurance Exchange, 2015-2017

The two tables below present information on the participation of issuers in  each state’s small group health insurance exchange from 2015 to 2017  and the market share of the largest and three largest issuers from 2015 to  2017.

Appendix V: Number and Market Share of Largest Issuers Participating in Each State’s Overall Individual Market

The two tables below present information on the participation of issuers in  each state’s overall individual health insurance market from 2011 to 2016,  and the market share of the largest and three largest issuers from 2014 to  2016.

Appendix VI: Market Share for Consumer Operated and Oriented Plans That Participated in the Exchanges

Table 11 provides market share for the 23 consumer operated and  oriented plans (CO-OPs) participating in state individual market and Small  Business Health Options Program exchanges for 2015 through 2017. CO- OPs are new consumer-governed, nonprofit issuers created under the  Patient Protection and Affordable Care Act. Out of the 23 CO-OPs  originally operating in 2014, all but four, operating in five states, had  ceased operations by the end of 2017.

Appendix VII: Number and Market Share of Largest Issuers Participating in Overall Small Group Health Insurance Market

The two tables below present information on the participation of issuers in  each state’s overall small group health insurance market from 2011 to  2016 and the market share of the largest and three largest issuers from  2014 to 2016.

Appendix VIII: Number and Market Share of Largest Issuers Participating in Each State’s Overall Large Group Health Insurance Market

The two tables below present information on the participation of issuers in  each state’s overall large group health insurance market from 2011 to  2016 and the market share of the single largest and three largest issuers  from 2014 to 2016.

Appendix IX: GAO Contact and Staff Acknowledgments

In addition to the contact named above, William D. Hadley, Assistant  Director; Katherine L. Amoroso, Analyst-in-Charge; Priyanka Sethi  Bansal; Giselle Hicks; John Lalomio; and Sarah-Lynn McGrath made key  contributions to this report. Also contributing were Yesook Merrill; Laurie  Pachter; Vikki Porter; Oliver Richard; and Emily Wilson.

There may be several companies selling health insurance in a given market, but we've previously found that most people generally enroll with one of a few companies. When that happens, it can mean less competition and higher premiums for that area.

We updated our work with more recent private insurance data. The overall story is similar: The 3 largest companies held 80% or more of the market in at least 37 states.

Available data on the Affordable Care Act insurance exchanges had similar trends. Three or fewer companies held 80% or more of the market in at least:


Global Health Assistance: Awardees' Declinations of U.S. Planned Funding Due to Abortion-Related Restrictions

The United States is the world's largest donor of global health assistance. Congress provided about $8.7 billion for the Global Health Programs (GHP) account in fiscal year 2018. In 2017, the President reinstated and expanded a policy, which now requires foreign NGOs to agree that, as a condition of receiving global health assistance, they will not perform or actively promote abortion as a method of family planning or provide financial support during the award term to other foreign NGOs that conduct such activities. The Reagan administration first implemented this policy, known as the Mexico City Policy, in 1984, and subsequent administrations have rescinded and reinstated it. The Mexico City Policy initially applied only to family planning and reproductive health assistance, which received about $560 million of GHP funds in fiscal year 2018. Upon reinstating the policy, the Trump Administration renamed it PLGHA and applied it to all global health assistance to the extent allowable by law. GAO was asked to review the implementation of the PLGHA policy. This report identifies (1) global health assistance awards that U.S. agencies determined to be subject to the U.S. government's PLGHA policy requiring foreign NGOs to agree that they would not perform or actively promote abortion as a method of family planning, and (2) planned funding for awards involving NGOs that declined to accept the terms and conditions of this policy. GAO analyzed data provided by U.S. agencies of awards subject to the PLGHA policy and awards in which NGOs declined to accept the terms and conditions of this policy.

U.S. agencies reported to GAO that from May 2017 through fiscal year 2018, they applied the Protecting Life in Global Health Assistance (PLGHA) policy to over 1,300 global health awards. The policy's restrictions on performing or actively promoting abortion as a method of family planning applied to active awards that received new funding after the policy was implemented, and all funding for new awards made after May 2017. As of September 30, 2018, about $12 billion in estimated planned award funding was subject to the policy. The U.S. Agency for International Development (USAID), with over $6 billion, and the Centers for Disease Control and Prevention (CDC), with over $5 billion, awarded about 96 percent of this amount. Agencies implemented these awards across multiple geographic regions and global health assistance areas. About two-thirds of estimated planned funding subject to the policy supported HIV/AIDS assistance, while the remaining third supported other global health areas, such as maternal and child health, and family planning and reproductive health. Over two-thirds of planned funding subject to the policy was for awards in Africa.

U.S. agencies identified seven prime awards and 47 sub-awards in which non-governmental organizations (NGOs) declined to accept the terms and conditions of the PLGHA policy, and these awards had about $153 million remaining in estimated planned funding not obligated as of September 30, 2018. The seven prime awards that were declined included six USAID awards and one CDC award and amounted to about $102 million of the $153 million in estimated planned funding that was not obligated. Marie Stopes International and the International Planned Parenthood Foundation declined the two largest of these awards, resulting in about $79 million in planned funding that was not obligated. These two awards included, among other activities, mobile family planning and reproductive health outreach activities to underserved, rural populations in multiple countries. USAID identified all of the 47 sub-awards that were declined, which had a total of about $51 million in planned funds that was not obligated. Thirty-two of the 47 subawards were intended for Africa.

Source: GAO analysis of agency reported data | GAO-20-347

The United States is the world’s largest donor of global health assistance.  In fiscal year 2018, Congress appropriated about $8.7 billion for the  Global Health Programs (GHP) account managed by the Department of  State (State) and the U.S. Agency for International Development  (USAID). In January 2017, the President reinstated and expanded a  policy requiring foreign nongovernmental organizations (NGO) to agree  that, as a condition of receiving family planning assistance, they would  not perform or actively promote abortion as a method of family planning.  The Reagan administration implemented the first iteration of this policy,  known as the Mexico City Policy, in 1984. The policy initially applied only  to USAID family planning and reproductive health assistance. The Trump  Administration renamed the policy Protecting Life in Global Health  Assistance (PLGHA) and applied it to all global health assistance to the  extent allowable by law. Opponents of the policy argue it could limit  access to health care, particularly in places that rely on NGOs who  cannot disentangle family planning services from other global health  assistance, such as HIV/AIDS. State has emphasized that the policy  does not affect the level of funding for global health assistance and U.S.  agencies can reprogram funds if declined by NGOs to other organizations  who agree that they will not perform or actively promote abortion as a  method of family planning.

You asked us to review the implementation of the PLGHA policy. This  report identifies (1) global health assistance awards that U.S. agencies  determined to be subject to the U.S. government’s PLGHA policy  requiring foreign NGOs to agree that they would not perform or actively  promote abortions as a method of family planning, and (2) planned  funding for awards involving NGOs that declined to accept the terms and  conditions of this policy.

To identify the global health assistance awards subject to the terms and  conditions of the PLGHA policy, we obtained data from State, the  Departments of Health and Human Services (HHS) and Defense (DOD),  and USAID on all relevant awards active when the policy was  implemented in May 2017 and those awarded between May 2017 and  September 30, 2018. HHS provided data for four component agencies:  the Centers for Disease Control and Prevention (CDC), the Health  Resources and Services Administration, the National Institutes of Health,  and the Substance Abuse and Mental Health Services Administration.  DOD provided data for two component agencies: the Department of  Defense HIV/AIDS Prevention Program and the Department of the Army.  We analyzed the data to describe the agencies’ reported number and  estimated total value of the awards, the amount obligated and the  estimated amount of planned funding for these awards that was not yet  obligated as of September 30, 2018, the implementing agency, the type  of global health assistance, and the recipient countries.

Funds obligated before the PLGHA policy was first implemented in May  2017 were not subject to the policy’s terms and conditions. To estimate  the value of planned funds not yet obligated as of September 2018 and  therefore subject to the PLGHA policy, we subtracted the obligated  amount from the estimated total award value of each award. While this calculation provides an estimate of the funds subject to the PLGHA, it is  limited by two factors. First, while planned award funding that was not  already obligated before May 2017 when PLGHA was first implemented  was made subject to the PLGHA policy, agencies did not have obligations  data as of May 2017 readily available but were able to readily identify  obligations as of September 30, 2018. Therefore, information provided on  planned funding that was not yet obligated as of September 30, 2018,  may not capture all of the funding made subject to the PLGHA policy  because it does not include obligations between May 2017 and  September 30, 2018, for NGOs that accepted PLGHA terms and  conditions. Second, estimates of total award value can change over time,  according to agency officials. For example, awards could have extensions  with additional funding not yet reflected in the estimated total award  values agencies provided us. In addition, the estimated total award values  the agencies provided could be based on a maximum or ceiling for some  awards, which may overstate actual amounts.

To identify the awards active in May 2017 involving NGOs that declined to  accept the PLGHA terms and conditions following implementation of the  PLGHA policy, we requested data from agencies identifying any prime  award or sub-award where the NGO declined to accept the terms and  conditions, and thus ceased receiving U.S. global health assistance  funding under those awards. With the exception of one CDC award, only  USAID identified instances in which NGOs with active prime or sub- awards declined to accept the PLGHA terms and conditions. We  analyzed CDC’s and USAID’s data on declined awards to describe the  number and estimated total value of these awards, as well as the amount  of funding these agencies reported as obligated as of September 30,  2018, the amount of planned funding that was not yet obligated as of this  date, the type of global health assistance, and the recipient countries.  Efforts taken by prime awardees to replace declined sub-awards were not  part of our review. We also interviewed agency officials and  representatives of Marie Stopes International (MSI) and International  Planned Parenthood Federation (IPPF), two prime awardees that publicly  declined to accept the terms and conditions of the PLGHA policy. These  two NGOs declined the largest active USAID awards and their local  affiliates were implementers of many of the sub-awards that were also  declined.

To obtain information that was as complete and consistent as possible  from each relevant agency on all prime awards subject to the PLGHA  policy, as well as prime and sub-awards in which NGOs declined to  accept the policy’s terms and conditions, we created data collection  instruments. We examined the reliability of the data identified by the  agencies through our data collection instruments and found them to be  sufficiently reliable for the purposes of delineating the agencies,  assistance areas, countries, estimated total value of awards, and  obligations, as well as for calculating planned funding that was not  obligated as of September 30, 2018, to estimate the amount of funding  subject to the policy. See appendix I for details on our scope and  methodology.

We conducted this performance audit from April 2018 to March 2020 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Background The Mexico City Policy and the PLGHA

The Mexico City Policy, which the U.S. government announced at the  United Nations Conference on Population in Mexico City in 1984, required  foreign NGOs to agree they would not, as a condition for receiving U.S.  assistance for family planning, perform or actively promote abortion as a  method of family planning. As shown in figure 1, subsequent  administrations have rescinded or reinstated the policy through executive  branch action, typically through presidential memoranda.

In a January 2017 Presidential Memorandum, the Trump Administration  reinstated and expanded the Mexico City Policy, directing the Secretary  of State in coordination with the Secretary of Health and Human Services  to implement a plan to extend the requirements of the reinstated policy to  all global health assistance furnished by all departments or agencies to  the extent allowable by law. Consequently, the policy, later renamed  PLGHA, applies to billions of dollars in annual U.S. global health  assistance—such as HIV/AIDS, maternal and child health, and malaria— rather than only family planning and reproductive health assistance,  which received about $560 million in GHP account funding in fiscal year  2018.

State reported that USAID, State, and DOD began applying the PLGHA  policy as of May 15, 2017, and HHS applied the policy as of May 31,  2017. The affected departments and agencies applied the policy to:  (1) All existing grants and cooperative agreements that provide global  health assistance that received new funding after May 2017. Agencies  established a PLGHA standard provision for inclusion in relevant grants  and cooperative agreements for global health assistance requiring foreign  NGOs to agree that, during the term of the award, they would not perform  or actively promote abortion as a method of family planning in foreign  countries, or provide financial support to any foreign NGO that does.  Agency officials stated that after the policy was implemented, when  additional funds were to be obligated to relevant awards with foreign  NGOs, these organizations would be required to accept the PLGHA terms  and conditions to receive these additional funds, or decline the award.  (2) All new grants and cooperative agreements that provide global health  assistance awarded after May 2017, according to a State report.

The PLGHA terms and conditions apply to foreign NGOs that receive  global health assistance prime awards or sub-awards. Prime awardees,  including U.S. NGOs, may not provide assistance under the awards to  any foreign NGOs that perform or actively promote abortion as a method  of family planning, are required to include the PLGHA standard provision  in sub-awards to foreign NGOs, and may be held liable for the sub- awardee’s failure to comply with the conditions of the policy.

According to UN reporting, the legality of abortion varies among countries  receiving U.S. global health assistance. This may result in some countries  legally permitting abortion services that are not permitted under the  PLGHA policy, according to NGO representatives we met with. The  representatives noted that under these circumstances, foreign NGOs  would be prohibited under the policy from providing such services, even  with non-U.S. funds, as a condition of receiving U.S. global health  assistance. Additionally, in March 2019, the Secretary of State clarified  that foreign NGOs that accept U.S. global health assistance may not  provide financial support, “with any source of funds and for any purpose,  to another foreign NGO that performs, or actively promotes, abortion as a  method of family planning.”

According to agency officials, the PLGHA terms and conditions do not  apply under the following circumstances:

Global health contracts. State reported that the executive branch is  taking steps to develop a PLGHA contract clause through a formal  rule-making process required to revise the Federal Acquisition  Regulation.

Awards funded out of the Food for Peace program.

Water Supply and Sanitation assistance funded from the  Development Assistance account.

Assistance provided directly by U.S.-based organizations. The  PLGHA policy does apply, however, to sub-awards made by U.S.- based organizations to foreign NGOs.

Assistance provided directly to national governments, such as  ministries of health.

Assistance to multilateral organizations. This includes but is not  limited to U.S. global health funds provided to the Global Fund to  Fight AIDS, Tuberculosis, and Malaria (the Global Fund) and the Joint  United Nations Program on HIV/AIDS (UNAIDS).

In a May 2017 briefing on the PLGHA policy, State noted that  humanitarian assistance, including State Department migration and  refugee assistance activities, USAID disaster and humanitarian relief  activities, and U.S. Department of Defense disaster and humanitarian  relief were also all excluded from the policy. State also noted that the  Secretary of State, in consultation with the Secretary of HHS, may  authorize additional case-by-case exemptions to the policy.

Funding for U.S. Global Health Programs Accounts in Fiscal Year 2018

Congress provided about $8.7 billion for the Global Health Programs  account (GHP) in fiscal year 2018, most of which supported HIV/AIDS  assistance managed by State and implemented through transfers of  funds to several agencies and contributions to multilateral organizations  (see table 1). Because of the various exclusions described above, not  all global health funds are subject to the PLGHA policy. In particular,  State’s fiscal year 2018 contribution of $1.35 billion to the Global Fund is  not subject to the policy because it is a multilateral institution.

U.S. Agencies Applied the PLGHA Policy to Over 1,300 Awards as of the End of Fiscal Year 2018 USAID and CDC Had the Most Awards and Planned Funds Subject to the PLGHA Policy

USAID and CDC had the most global health assistance awards subject to  the PLGHA policy, representing more planned funding than other  agencies (see table 2). In total, U.S. agencies reported that they applied  the PLGHA policy to 1,309 prime awards active in May 2017 or made  through September 2018. There were 761 active awards when agencies  implemented the policy in May 2017, and 548 new awards that began  after they implemented the policy. Most awards started in fiscal year  2016 or later, although some started earlier. Average award duration  varied among agencies. The estimated total value of these 1,309 awards  was almost $29 billion across multiple fiscal years, of which about $12  billion was planned funding that had not yet been obligated as of  September 30, 2018, and is subject to the PLGHA policy upon  acceptance of the PLGHA terms and conditions.

USAID awards represented 50 percent of planned funds that were not yet  obligated for awards subject to the PLGHA policy, while CDC awards  represented 46 percent of such funds. Other HHS component agencies’  awards subject to the policy combined represented almost 4 percent of  planned funds that were not yet obligated. DOD and State awards  represented less than 1 percent of these funds. State’s awards were  relatively numerous but shorter-term and of smaller dollar value than  other agencies’ awards.

The Majority of Estimated Planned Award Funding Subject to PLGHA Supported HIV/AIDS Assistance and Was Directed to Countries in Africa

Agencies reported that, as of September 30, 2018, over $8 billion of the  more than $12 billion in estimated planned funding (over 66 percent) for  awards subject to PLGHA that were active between May 2017 and  September 2018 was for HIV/AIDS assistance (see table 3). All DOD  and State planned funding, and almost all HHS planned funding,  supported HIV/AIDS assistance. USAID reported that its planned funding  was distributed across several global health areas including HIV/AIDS,  family planning and reproductive health, maternal and child health, and  tuberculosis.

Agencies reported that over $8 billion of the more than $12 billion (over  66 percent) of the estimated planned funding for awards subject to  PLGHA that were active between May 2017 and September 2018 was for  awards in Africa (see table 4). Awards in Asia accounted for the second  highest level of planned funding for an individual region at almost $600  million (5 percent). Global awards implemented in more than one region  represented about $3 billion in planned funding (26 percent).

By global health assistance area and region, HIV/AIDS assistance in  Africa accounted for the most planned funding that had not yet been  obligated for awards subject to PLGHA: over $6 billion of about $12 billion  (52 percent) (see table 5). The next largest category was global HIV/AIDS  assistance awards, which accounted for over $1 billion (13 percent).

The top 10 countries receiving the most estimated planned funding that  had not yet been obligated under awards subject to PLGHA accounted for  over $6 billion of more than $12 billion (54 percent) (see table 6). All 10  countries are in sub-Saharan Africa. Of these countries, South Africa had  the most planned funding remaining (over $2.4 billion) that was subject to  the policy. See appendix II for more details on the locations of awards  subject to PLGHA.

Agencies Identified 54 Prime and Sub- Awards in which NGOs Declined to Accept PLGHA Conditions

USAID Awarded All but One of the Projects in which NGOs Declined to Accept PLGHA Conditions

USAID identified 53 awards—six prime awards and 47 sub-awards in  which NGOs declined to accept PLGHA terms and conditions. CDC  identified one prime award in which an NGO declined to accept the  policy’s terms and conditions. These prime and sub-awards had about  $153 million in estimated planned funding remaining that was not  obligated at the end of fiscal year 2018 (see table 7). DOD and State did  not identify any declinations. The remaining planned funding that was  not obligated as of September 30, 2018, represents an estimate of the  amount that had been planned for the awards but which was not  obligated under these awards because awardees declined to accept the  terms and conditions of the PLGHA policy, according to the agencies.

USAID Identified Six Prime Awards in Which NGOs Declined to Accept PLGHA Terms and Conditions

USAID identified six prime awards in which NGOs declined to accept  PLGHA terms and conditions resulting in an estimated $94 million in  planned funding that was not obligated as of September 30, 2018. These  six prime awards, presented in table 8, supported different global health  assistance areas. Three of the awards were global in scope, two provided  assistance to India, and one provided assistance to Zimbabwe.

The two largest of the six prime awards declined were global awards to  Marie Stopes International (MSI) and International Planned Parenthood  Federation (IPPF), both of which publicly stated that they could not meet  the conditions of PLGHA because abortion services or referrals are part  of reproductive health care services they provide and a right to which their  patients are entitled. Together, these two awards had about $79 million  remaining in planned funding that was not obligated as of September 30,  2018.

The primary objective of these two awards was to increase access to and  use of family planning products and services, although the award to MSI  also supported maternal and child health and HIV/AIDS and the IPPF  award supported HIV/AIDS in addition to family planning and reproductive  health, according to information provided by USAID. According to MSI  and IPPF representatives, these two awards both included, among other  activities, mobile family planning and reproductive health outreach  activities that reached underserved rural populations in multiple countries.  While MSI and IPPF were able to obtain some funding from other donors  when the USAID awards were suspended, the additional funds fell far  short of the funds provided by USAID, according to the organizations’  representatives, resulting in reductions in family planning services they  provided to recipient countries.

CDC Identified One Prime Award for Which the NGO Declined to Accept PLGHA Conditions

CDC identified one prime award in which an NGO declined to accept the  PLGHA terms and conditions. According to CDC, this award had about  $8.4 million remaining of a 5-year, $10.5 million award ceiling for delivery  of HIV services in sexual and reproductive health clinics and in  confidential clinics for commercial sex workers in Ethiopia.

USAID Identified 47 Sub- Awards in Which NGOs Declined to Accept PLGHA Conditions

USAID identified 47 global health sub-awards in which foreign NGOs  declined to accept the PLGHA policy’s terms and conditions and thus  ceased receiving U.S. funding under those awards following  implementation of the PLGHA policy (see table 9). The planned funding  that was not obligated for these sub-awards amounted to about $51  million, as of September 30, 2018. As shown in table 9, sub-awards with  NGOs that declined to accept the PLGHA terms and conditions involved  multiple global health assistance areas. Family planning and reproductive  health represented the largest share of planned sub-award value  involving declinations, followed by awards supporting multiple global  health areas and HIV/AIDS. Sub-awards involving declinations also  addressed maternal and child health, tuberculosis, and nutrition  assistance.

According to data provided by USAID, sub-awards in which NGOs  declined the PLGHA terms and conditions occurred in multiple regions,  but primarily in countries in Africa. USAID identified 32 sub-awards  implemented in African countries involving NGOs that declined the  PLGHA terms and conditions following implementation of the policy. The  estimated total value of these sub-awards was about $56 million, of which  more than half (about $32 million) remained as planned funding that was  not obligated as of September 30, 2018 (see table 10).

Of the 47 sub-awards for which the PLGHA terms and conditions were  declined, 26 were declined by affiliates of either IPPF or MSI. The  estimated total award value of these 26 sub-awards amounted to over  half of the value of the 47 sub-awards (see figure 2).

Four countries had the largest estimated amount of sub-award funds  declined by NGOs, with at least $8 million in planned funding that was not  obligated as of September 30, 2018 (see table 11). For example, two  declined sub-awards implemented in Senegal had a combined $9.7  million in planned funding that was not obligated as of September 30,  2018. These two sub-awards were implemented by an MSI affiliate that,  among other services, used the USAID funds to operate mobile family  planning clinics for beneficiaries in rural, underserved areas. According to  MSI representatives, these sub-awards did not involve abortion services,  which MSI indicated are illegal in Senegal. However, the NGO declined  the sub-award because of its affiliation with MSI, according to the  representatives.

Bangladesh had the most sub-awards in which NGOs declined the  PLGHA terms and conditions with five. Total planned funding that was not  obligated for these five sub-awards amounted to about $9 million as of  September 30, 2018. These awards supported multiple areas of global  health assistance including family planning and reproductive health,  tuberculosis, nutrition, and maternal and child health.

We provided a draft of this report to DOD, HHS, State, and USAID, and  for review and comment. In their written comments, reproduced in  appendix III, USAID stated that it found our estimates of the number and  value of awards subject to PLGHA and those in which NGOs declined to  accept PLGHA the terms and conditions to be reasonable given the data  available. USAID also elaborated on limitations with available data, which  we believe are consistent with the data limitations we describe in this  report. DOD, HHS, and State did not provide written comments. In  addition, HHS, State, and USAID provided technical comments, which we  incorporated as appropriate.

We are sending copies of this report to the appropriate congressional  committees and the Secretaries of Defense, Health and Human Services,  and State, and the Administrator of the U.S. Agency for International  Development. In addition, the report is available at no charge on the GAO  website at http://www.gao.gov .

If you or your staff have any questions about this report, please contact  me at (202) 512-3149 or gootnickd@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix IV.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to identify (1) global health assistance awards that  U.S. agencies determined to be subject to the terms and conditions of the  U.S. government’s Protecting Life in Global Health Assistance (PLGHA)  policy requiring foreign non-governmental organizations (NGOs) to agree  that they would not perform or actively promote abortions as a method of  family planning, and (2) planned funding for awards involving NGOs that  declined to accept the terms and conditions of this policy.

To identify the global health assistance awards subject to the terms and  conditions of the PLGHA policy, we obtained data from the Departments  of State (State), Health and Human Services (HHS), and Defense (DOD),  and the U.S. Agency for International Development (USAID) on all  relevant awards active when the policy was first implemented in May  2017 or awarded through September 30, 2018. We identified the  relevant agencies based on a February 2018 State report on the initial  implementation of PLGHA and discussions with each agency to identify  affected component agencies. Component agencies within HHS that  identified awards subject to the PLGHA included the Centers for Disease  Control and Prevention (CDC), the National Institutes of Health, the  Health Resources and Services Administration, and Substance Abuse  and Mental Health Services. Within DOD, the Department of the Army  and the DOD HIV/AIDS Prevention Program identified awards subject to  the policy.

To obtain information that was as complete and consistent as possible  from each relevant agency on all awards subject to the PLGHA terms and  conditions, we created a data collection instrument. This instrument  asked the agencies to identify all awards that were subject to the PLGHA,  that were either active in May 2017 when the PLGHA policy was first  implemented or that were new awards through the end of fiscal year 2018  (September 30, 2018). We analyzed the responses to our data collection  instrument to describe the number and estimated total value of the  awards, the amount obligated as of September 30, 2018 and the  estimated amount of planned funding that was not yet obligated for these  awards, the implementing agency, the type of global health assistance,  and the recipient countries.

Agencies defined estimated total award value as either award ceilings or  total award amounts for the life of the award including both funding that  recipient organizations may have obligated prior to the PLGHA policy as  well as funding that organizations have not yet received but may receive  in future years. We asked the agencies to categorize the type of global  health assistance based on the Foreign Assistance Standardized  Program Structure and Definitions, which State updated in 2016. During  the development of this data collection instrument, we discussed drafts  with each of the agencies and made modifications as appropriate. We  provided definitions for each data element requested that allowed for  variations in the ways these agencies collect and record data on awards.

To estimate the value of planned funds not yet obligated and therefore  subject to the PLGHA policy, we subtracted the obligated amount from  the estimated total award value of each award. While this calculation  provides an estimate of the funds subject to the PLGHA, it is limited by  two factors. First, while planned award funding that was not already  obligated before May 2017 when PLGHA was first implemented was  made subject to the PLGHA policy, agencies did not have obligations  data as of May 2017 readily available but were able to readily identify  obligations as of September 30, 2018. Therefore, information provided on  planned funding that was not yet obligated as of September 30, 2018,  may not capture all of the funding made subject to the PLGHA policy  because it does not include obligations between May 2017 and  September 30, 2018, for NGOs that accepted PLGHA terms and  conditions. Second, estimates of total award value can change over time,  according to agency officials. For example, awards could have extensions  with additional funding not yet reflected in the estimated total award  values agencies provided us. In addition, the estimated total award values  the agencies provided could be based on a maximum or ceiling for some  awards, which may overstate actual amounts.

To identify the prime and sub-awards active in May 2017 that involved  NGOs that declined the PLGHA terms and conditions, we developed  additional data collection instruments—one for prime awards between  agencies and NGOs and one for sub-awards between prime awardees  and NGOs—to request information on these awards from the relevant  agencies. We followed the same process described above to develop  these two additional instruments to identify estimated total value of the  awards, obligated amounts as of September 30, 2018, the implementing  agency, the type of global health assistance, and the recipient countries.

USAID identified 53 declined prime or sub-awards and CDC identified  one. For these agencies, identifying these awards involved contacting  staff based in overseas posts. The other agencies reported to us that they  had no awards in which NGOs declined the PLGHA terms and conditions.  A USAID official also noted that the sub-award amounts they provided to  us could vary from year to year, which would affect the amounts of  remaining planned funding that was not obligated as of September 30,  2018. Nevertheless, we relied on these amounts to estimate the amount  of planned funding that was not obligated under these awards as of the  end of fiscal year 2018 because the NGOs declined to accept the PLGHA  terms and conditions. Efforts taken by prime awardees to replace  declined sub-awards were not part of our review.

In addition to meeting and corresponding with USAID and CDC officials to  discuss awards involving declinations, we interviewed representatives of  Marie Stopes International (MSI) and International Planned Parenthood  Federation (IPPF)—two prime awardees that publicly declined to accept  the terms and conditions of the PLGHA policy. These two NGOs declined  the two largest of the six prime awards declined and their local affiliates  were implementers of many of the sub-awards that were declined. We  discussed with MSI and IPPF the characteristics of these two awards and  the accuracy of USAID’s data provided to us on them.

We examined the reliability of the data on awards identified by the  agencies through testing for logical assumptions such as whether award  start dates preceded their end dates, and whether an award’s estimated  total value met or exceeded the total amount of funding that had been  obligated to it. In addition, we met with agency officials to discuss and  correct any discrepancies in the award data they provided. However, we  did not independently verify the awards identified or the funds associated  with each award. Overall, we found the data on awards subject to the  PLGHA policy and in which NGOs declined the terms and conditions of  the policy to be sufficiently reliable for the purposes of delineating the  agencies, assistance areas, countries, estimated total value of awards,  and obligations. As noted earlier, we also calculated the amounts of  planned funding that were not obligated as of September 30, 2018, to  estimate the amount of funding subject to the policy.

Appendix II: Awards Subject to the Protecting Life in Global Health Assistance (PLGHA) Policy by Location

Global health awards that agencies identified as subject to the PLGHA  terms and conditions amounted to almost $29 billion in estimated total  award value. This amount includes funding that agencies had obligated  before implementing the PLGHA policy in May 2017 as well as funding  across multiple fiscal years and for potential award extensions. Agencies  reported that about $12 billion in funding was not yet obligated as of  September 30, 2018. Award funding included assistance to specific  countries, as well as awards that were regional or global in scope (see  table 12).

Appendix III: Comments from the U.S. Agency for International Development

Appendix IV: GAO Contacts and Staff Acknowledgments

David Gootnick (202) 512-3149 or gootnickd@gao.gov  In addition to the individual named above, Leslie Holen (Assistant  Director), Howard Cott, Martin de Alteriis, Kelsey Griffiths, Christopher  Keblitis, Andrew Kurtzman, Michael McAtee, Aldo Salerno, Fatima Sharif,  and Alexander Welsh made significant contributions to this report.

In 2017, the U.S. government reinstated and expanded a policy that requires foreign nongovernmental organizations (NGOs) to agree not to perform or promote abortion as a condition for receiving U.S. global health assistance. This assistance supports family planning, HIV/AIDS prevention and treatment, and other health areas.

We found 54 instances in which NGOs did not accept this policy, resulting in about $150 million in declined funding.

The policy applied to over 1,300 global health projects as of September 2018, with an estimated $12 billion in planned U.S. assistance.