Monthly Archives: July 2013

The Affordable Care Act May Produce Affordable Care.

We last reported in on the changes in US health care in an April blog.  At that time we looked at the number of businesses providing insurance to their employees and the costs of health care in the US as it compared to other industrial nations.  It was not a pretty picture; health care costs here are higher than in other nations and the number of employers providing insurance is going down. Some developments this month actually look better and may provide a partial explanation of the earlier cost findings.  

A story in the Washington Post caught our eye when it suggested that the Affordable Care Act – Obamacare if you prefer – was driving insurance premiums down for small business in Washington, D.C.  A little research indicated similar headlines coming from New York State.  It appears that, as the insurance exchanges move toward operational status, the premium costs are coming in lower than expected.  In the other Washington, as the Insurance Exchange there has been posting the plans offered by carriers, costs have been dropping steadily with individual carriers even revisiting and lowering their earlier premium offerings.  A similar situation is going on in Maryland where insurance costs are coming in nearly one-third lower than expected.  The article goes on to note

“The Department of Health and Human Services recently evaluated proposed insurance premiums in 11 states, reporting that prices for small-business plans in those states have come in an average of 18 percent lower than the premiums employers were paying prior to the Patient Protection and Affordable Care Act.” 


How, one might ask, can costs be going up and premiums coming down?  One explanation could be that the number of uninsured people in the system was driving prices higher as health care providers needed to recover the costs of uncompensated care.  Uncompensated care in U.S. hospitals went over the $41 billion mark in 2011, according to the American Hospital Association (AHA); there is a corresponding number for physician’s services, but it is hard to find.  The people who have been funding this uncompensated care are: (1) people with insurance and (2) people without insurance who pay their medical bills.  As underwriters look at the impact of increasing the insured population and consequently reducing uncompensated care and distributing the actual costs of services to a broader base of insured people, it appears they are anticipating the ability to reduce claim costs.  That and market completion are two effects policymakers had in mind when proposing universal health insurance and it appears to be leaning that way, at present. 

It may not be all good news.  Some states have special circumstances that may impact the potential savings.  Alabama, for example, is a state where one carrier has a majority of the market and any impact from competition may take time to develop.  Washington State was thought to be in that category for different reasons.  Our state had already instituted community rating and guaranteed issue in the 1990’s and a pretty depressing Forbes article suggested we were in for price hikes of up to 80%. 

The evidence from the state suggests otherwise.  The Washington Insurance Exchange has just published information about the health insurance plans and rates to be offered here.  There are nine carriers that have proposed rates and the rates are “competitive and are lower than previously expected.”  This is pretty good news for Washington State and some further evidence that the Affordable Care Act may, indeed, live up to its name.  


The “Monkey Trial” – Then and Now

July 10th is the anniversary of the Scopes Trial – the famous “Monkey Trial” in 1925 that pitted lawyers William Jennings Bryan and Clarence Darrow against each other over the issue of teaching evolution Tennessee.  A high school temporary teacher, John Scopes, was tried for violating the Tennessee’s Butler Act, a law that prohibited the teaching of evolution. 

Famous enough in its own right, the trial became a play and then a move – Inherit The Wind –a fictionalized account of the trial done by Stanley Kramer in 1960.  Stars Spencer Tracy, Frederic March and Gene Kelly headlined an examination of the trial in the context of the first amendment and the McCarthy years in the mid-1950’s.  Ironically, as one expert noted, “…they set up the Creationists as strawmen for McCarthy and they didn’t think there were any Creationists left. But the strawmen outlived the McCarthyites.”  The debate over teaching evolution in the schools is still alive and well. 

The so-called Monkey Trial  got underway July 10, 1925 in Dayton Tennessee.  It was pretty much a setup from the start.  Scopes wasn’t a regular teacher and he had worked with a local businessman to create the violation he was charged with.  The Butler Act had made it a misdemeanor to teach any theory that man has descended from a lower order of animals.  Once arrested and charged, Scopes looked to the American Civil Liberties Union (ACLU) to help out in his defense.   When the ACLU took up the challenge for the defense, William Jennings Bryan – a former presidential candidate and a fundamentalist – volunteered to help the prosecution.  Clarence Darrow, a noted attorney of the time agreed to join the ACLU’s defense team.  

The battle was on, but evidently it looked more like a zoo than a war.  As the press and an interested citizenry congregated to watch the trial, the crowds drew the inevitable collection of street entrepreneurs down to a chimpanzee exhibit and a man from Vermont posing as the “missing link.”  As a measure of the national interest, it was the first trial to be broadcast on radio.  

The defense was less interested in Scopes and more interested in calling the Butler Act into question.   That was a fact that evidently occurred to the judge as well and he destroyed the defense plans by ruling that scientific testimony on evolution was inadmissible.  He assured in that ruling the trial would proceed as the Scopes Trial, not the Butler Act Trial.   Clarence Darrow countered with a switch in strategy.  He called Bryan as his only witness and proceeded in his examination to discredit Bryan’s literal interpretation of the Bible.  Then, in his closing argument, Darrow called on the jury to return a verdict of guilty so that the case could be appealed.  The jury took just a few minutes to oblige Darrow and Scopes was convicted of a misdemeanor and fines $100.  

The verdict was later thrown out on a technicality on appeal and, in fact, for all the noise, nothing really happened.  Textbooks in Tennessee had all mention of evolution removed for some time after the trial and it was not until 1967 that the Butler Act was finally repealed.  

Oddly enough, the trial that many might think had settled the notion of banning the teaching of evolution did no such thing.  States all around the country have had their own battles with the teaching of evolution even into the twenty first century.  Here in Washington State, the legislature introduced a bill in 2002, that proposed all state-purchased textbooks contain a disclaimer: “A message from the Washington State Legislature: This textbook discusses evolution a controversial theory … no one was present when life first appeared on earth.  Therefore, any statement about life’s origin should be considered as theory, not fact.   Study hard and keep and open mind.  Someday you may contribute to the theories of how living things appeared on earth.” 

Another bill introduced to the Education Committee of the Washington State Senate in 2002 declared “the legislature finds that the teaching of the theory of evolution in the common schools of the state of Washington is repugnant to the principles of the Declaration of Independence and thereby unconstitutional and unlawful. “ Neither bill moved on to passage.  

In fact, it appears the public itself has not made up its mind.  If you are interested, you can find some interesting recent statistics here.  

Mr. Zip Turns 50!

So, if you are over 50 years old, you were around “BZ” – before zip codes.  Now, for the big test question do you remember that the ZIP in Zip codes stands for Zone Improvement Plan – or maybe “Zone Improvement Program” or “Zoning Improvement Plan?”  Well, maybe no one remembers exactly and sources differ. What we do know is that the 5-digit zip code came into official existence on July 1, 1963 – 50 years ago this month.  It was not the post offices first attempt to bring some organization to the mail system.  Large cities in the U.S. had postal zones as far back as 1943, a wartime measure to help newly trained postal employees sort mail more quickly.

Ironically, the Zip code came into existence as a response to the same changes in technology that are now bedeviling the post office today – the revolution in computers.  Until the 1960’s mail moved primarily by rail to regional centers where it was then fanned out to its final destination.  The rise of business computing in the mid-century drove a huge increase in business mail – bills, catalogs, checks, banking and so forth, everything was traveling by mail.  The railroads had hit their peak earlier in the century and were beginning to decline as the family automobile replaced the family train ride and improving roadways offered transportation alternatives.  The U.S. Post Office was stuck in the middle and needed a good system to help support rapid mail distribution.  

Enter the Zip code.  A postal worker named Robert Moon is generally credited with at least roughing out the first system, at least to the three digit level in the 1940’s – with the old city postal zones providing some overlay.  

The first digit in the zip code represents a group of states.   For example Washington, Oregon, Alaska and California all begin with “9”; the second and third digits represent regions within that state grouping.   The fourth and fifth digits get down to specific areas, but do not necessarily correspond to cities.  Again, as an example 98368 is the zip code for Port Townsend, but also for a wider area in Jefferson County.  Most often, from the viewpoint of the US Postal Service, the first three digits identify a sectional center- the mail-sorting and distribution center for an area – and there can be more than one 3 digit code for a center. 

There is a general trend for east to west and north to south in the assignment of zip codes, but it isn’t as neat as you might think.  The lowest ZIP codes begin with ’0′and many are in New England.  But other ’0′ region zips are in Puerto Rico, the U.S. Virgin Islands and APO/FPO military addresses for personnel stationed in Europe. Currently, the lowest ZIP code, 00501, is in Holtsville, New York, not New England, but that is because there is a U.S. Internal Revenue Service center there and you know how they are.  Our here in the west, we are number “9”.

 mrzip.jpg The new zip codes were not greeted with open arms in 1963.  Locating American citizens by a number has always engendered some opposition and in the case of Zip codes it was even a factor in moving the US Postal Service out of the Executive Branch of the government and setting it up as a quasi-governmental service.  The post office created some clever advertising and promotion to sell the notion to the American public.  Mr. Zip was a cartoon figure the postal service used extensively to promote the use of Zip codes and they even enlisted the aid of famous personalities such as Ethel Merman to do public service announcements. Obviously, they caught on – so much so that in 1983, the post office introduced zip + 4.  

Today, Zip codes have moved well beyond just mail sorting.  Today you can look at census data by zip codes to find out demographic and economic information.  The USCensus Bureau can give you business data on 40,000 zip codes.  We even have “famous” zip codes like 90210 – Beverly Hills and schools have considered using zip codes as a factor in admissions.  It may be just a number, but it says a lot about you.