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Sebelius Fixes Preexisting Condition Fubar: Your Invoice Is In The Mail

Yesterday I wrote about the incompetence of Congress in drafting the ObamaCare legislation, specifically that they had written legislation that contradicted the broad promises of The One himself that preexisting conditions of children would be covered immediately. Many pundits commented that, on the contrary, that is not what the law said and insurance companies were quick to note the letter of the law.

Secretary of Health and Human Services Kathleen Sebelius fixed that problem stat:

The (health) industry's response followed a sternly worded letter from Sebelius earlier in the day. In it, the administration's top health care official tried to put an end to questions about the law's intent and wording.

"Health insurance reform is designed to prevent any child from being denied coverage because he or she has a pre-existing condition," Sebelius wrote to Ignagni. "Now is not the time to search for nonexistent loopholes that preserve a broken system."

A purer form of ObamaSpeak could not be found. The problem yesterday was not "nonexistent loopholes". Rather, it was the sloppy and poor work by Congress and its staffers in rushing through a complex piece of legislation without careful consideration.

But now that that problem is fixed, what of Sebelius' cure? Tom Maguire has some thoughts on that:

That was easy! The WSJ reports that all the HHS had to do was ask nicely and the question of whether children with pre-existing conditions got relief under the new health reform bill was solved...

It's worth remembering that, within reason, the insurance companies can play by any set of rules as long as they all play by the same rules. If some companies continue to deny coverage to families of children with pre-existing conditions, the firms that take them on will need to restructure as philanthropic enterprises.

And do keep in mind - since the insurers will be able to raise rates, they won't be paying for these kids (lib fantasies notwithstanding); the rest of us who pay insurance premiums will.
In that sense, this preserves the Democratic Party role as the party of random wealth transfers.
Just imagine that somewhere a self-employed software consultant pulling down several hundred thousand a year has been paying for his child's asthma treatment out of pocket because he can't get coverage. But now he can, thereby leading to an increase in the insurance premiums for everybody else, including Mailroom Mary, who is trying to get by on $25,000 a year. Such a victory for social justice!

How often will that be happening? No one knows! This new rule is not means tested as to beneficiaries and no one is yet eligible for premium subsidies, but Dems are thrilled anyway.

This may answer the question as to why health insurance premiums have risen during the past year. Those mean insurance companies are certainly good at one thing: anticipating higher costs. And that is what is on the way. Thanks, Mr. President! By means of coercion and not persuasion you have increased my cost of doing business without any commensurate benefit. It's truly a worker's paradise, isn't it?


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Comments (41)

Why do I think that people ... (Below threshold)
Don L:

Why do I think that people who would kind innocent babies in and out (Obamacide) of the womb, really don't give a hoot about children's healthcare? Children to them are potential propaganda targets and future people of the Obamacult. Beyond that - you can't find more hardened hearts!

Notice:Beware the ... (Below threshold)
bobdog:

Notice:

Beware the law of unintended consequences and the law of irresponsible conservative gossip-mongering.

By mentioning this issue, you have committed the offense of Contempt of Congress and you are hereby ordered to appear before The Grand Inquisitor Henry Waxman for public flogging on Monday next at 10:00 on the House floor. Please retain and submit all records, correspondence, computer logs, drafts, email, tweets, dark thoughts and any other incriminating or potentially embarrassing information to the House Energy and Commerce Committee secretary.

Public flogging will commence immediately after the reading of your confession and committee sentencing. No legal representation is required.

Be on time and look nice.

Sincerely,

The Hon. Henry Waxman, Esq.
Chairman
House Energy and Commerce Committee
US House of Representatives
Washington, DC

If it was "fubar" then, by ... (Below threshold)
Adrian Browne:

If it was "fubar" then, by definition, it couldn't be fixed.

Focus on repeal, magic, or perhaps some help from space aliens.

Right, steve-O. I would tru... (Below threshold)

Right, steve-O. I would trust some wacked out troll who goes around flinging the violent Reichwingerz trope in blind obedience to his OfA mrching orders, over people who have to follow the actual letter of the law to avoid ending up in jail.

This week's lesson for the ... (Below threshold)
cirby:

This week's lesson for the left-wing folks: "Hey, maybe you should pass a bunch of smaller, less-complicated bills, proofreading each one, instead of shoving through one massively-complicated mess that nobody has the chance to even read..."

The Democrats decided to try the old "find the needle in the haystack" trick, and it's just starting to bite them. Wait for the next round of really stupid mistakes, and the followup series of "it's someone else's fault!" press releases by the Dems.

"Those mean insurance compa... (Below threshold)
GarandFan:

"Those mean insurance companies are certainly good at one thing: anticipating higher costs."

Yeah, must be that they want to stay in business. Too bad they can't just run a printing press and make their own money.

Just like those EVIL corporations, following the law, have to start adjusting their ledgers in order to meet the future expenses of ObamaCare.

Why bother to go through th... (Below threshold)
kathie:

Why bother to go through the legislative process at all if DHS can change the rules by dictate from the President. We would have saved a lot of time if the President was just a dictator, like in Nationalizing education grants.

Correction should be HHS</p... (Below threshold)
kathie:

Correction should be HHS

Yeah, must be that ... (Below threshold)
SteveP:

Yeah, must be that they want to stay in business. Too bad they can't just run a printing press and make their own money.

Just like those EVIL corporations, following the law, have to start adjusting their ledgers in order to meet the future expenses of ObamaCare.

You people. You do nothing but defend a healthcare service industry that finds every way till Sunday to benefit their bottom line and screw you.

And all you do is feel sorry for them. Do each and every one of you have a mindblowing amount of stock in these companies? If not, please go defend a company that has your best interests in mind instead.

Nobody needs to feel sorry for the insurance industry. They will have 33 million more customers this year. They won't lose a penny.

Your outrage is misplaced. But that's only because you're too ignorant to understand that.

"HughS declared the heal... (Below threshold)
SShiell:

"HughS declared the health insurers were right and Obama was wrong."

And it was easy to do. Obama LIED! He didn't know what was in the bill. He didn't read it. And he sure didn't write it. He left it to the Pelosi, Reid and company and things fell through the crack. Quelle Surprise! And if there were no such problem why did Sebelius have to fix it? And that is assuming her "strong letter" in fact is such a fix.

Steve......why bother to ca... (Below threshold)
kathie:

Steve......why bother to care about any business at all......all they do is trade a service for money. If you don't like their service you are free to choose something else. If enough people choose something else the business modifies or looses. Oh, maybe that is the point, you are free to choose something else. My guess is that you don't mind prostituting your freedom of choice for Obama's dictates. How did you feel about your government when Bush was making the rules. My hunch is that you are fine with Obama, but Obama is just passing through and you may not be fine with the rules government makes for your life the next time around.

You people. You do nothi... (Below threshold)
Speller:

You people. You do nothing but defend a healthcare service industry that finds every way till Sunday to benefit their bottom line and screw you.
~SteveP

I said it before and I'll say it again:
Nothing was stopping Communists like you, SteveP, from starting your own Nonprofit Health Insurance Cooperative and running it for all those people that your ilk pretends were falling through the cracks of the existing system.

Stop pretending you are interested in helping the little guy.
Your support for ObamaKill is only because you hate the idea that someone somewhere is making a profit and you want to halt that.

And when this was ... (Below threshold)
Brett:
And when this was pointed out to him in the comments section of his corporation-licking post, HughS writes a new post "declaring" that the law has been "fixed" when in fact nothing was changed.

Precisely - and funny thing is that Kathleen Sebelius asserting something is not actually a "fix" to anything and changes absolutely nothing. Kathleen Sebelius, Barack Obama, etc, *saying things* is not actually the same as creating laws. Their statements mean absolutely nothing. The only thing that matters is what is written in black and white, which remains open to interpretation and challenge because it is so poorly written.

SteveP, you're a business o... (Below threshold)
SCSIwuzzy:

SteveP, you're a business owner (I'll take you at your word). What is it that you do, and what sacrifices of "the bottom line" do you make in the name of charity?

It's not the insurance companies I care about, it is the consumers, their actual level of care and their wallets, that I care about.
It's wholly predictable that if the government imposes new rules on any industry that said industry will try to shift the cost of that new burden. Predictable to everyone but Congress...

SteveP, you're a bu... (Below threshold)
SteveP:

SteveP, you're a business owner (I'll take you at your word). What is it that you do, and what sacrifices of "the bottom line" do you make in the name of charity?

Advertising agency. B2B clients. We also do pro bono work when it's a good cause.

We're under 50 people, but that's beside the point.

You folks seem to believe that EVERY business in existence would sell their mother to the wolves for a few extra bucks - and that, somehow, that's okay. Many companies do perfectly fine, despite the yearly changes in rent, salaries and employee benefits. I've gotten rid of people who didn't perform well. I've yet to get rid of someone because my "healthcare costs" were raised.

This isn't an issue of a private company. Health insurance outfits are public companies and they've long since given up the mantle of doing anything but for their bottom line. Everyone at the top are multimillionaires, the executive jobs are well paid and nobody's telling them they can't deny a terminal patient healthcare -- until now. They've had a great ride, but on the backs of dead people. It's more than a regular business when you're dealing with life and death in the way they do.

The problem is not the way I run my agency, it's how you people view business altogether. Most of you have probably never created a monthly report or dealt with tax forms beyond your W2.

But you are all gung ho about the health of companies that are making profit multiples that boggle the mind while denying the service they are charging to provide. Are you idiots? Maybe so.

But you are all gun... (Below threshold)
SteveP:

But you are all gung ho about the health of companies that are making profit multiples that boggle the mind while denying the service they are charging to provide. Are you idiots? Maybe so.

...and just to be clear, I'm talking about the insurance companies in this paragraphs.

What you should be angry about are these people trying to find loopholes so they can continue to deny children with pre-existing conditions.

But that would require living in some form of what's called "reality."

Many companies do perfec... (Below threshold)
Speller:

Many companies do perfectly fine, despite the yearly changes in rent, salaries and employee benefits. I've gotten rid of people who didn't perform well. I've yet to get rid of someone because my "healthcare costs" were raised.
~SteveP

Like you, SteveP, the companies you think are "doing fine" are small time.

I'll bet you don't have publically issued stocks, eh SteveP?
Why do you think people buy stocks in a company?
Do you think they want the value of their stocks to go up or down or just have the money they invested remain static and have the buying power of it eroded through inflation?

Am I asking questions that are too difficult for you to understand?
How much money do you think insurance companies have to have when they are insuring people that may have to claim for operations and post-op care that costs $millions per policy?

Do you think that having stock holders makes having that sort of money possible?

Why didn't Commies like you start your own Health Care Insurance Cooperative with your own money instead of using coercion and taking money from people who don't want to cooperate.

I might use this space to p... (Below threshold)
RicardoVerde:

I might use this space to point out that most people who have insurance are NOT insured by the insurance company. Most companies with more than about 50 employees are self insured. In other words, for most employed Americans (up til now) your employer paid for your medical procedures. The company didn't really want you to know this because it gave them cover for when a items was not covered. The insurance company was working as a contractor for the employer to process claims and to a large extent, take the blame for not covering some costs. What was covered or not covered was negotiated in a package when the employer hired the processing company.

There is/was some insurance provided by the insurance company to be sure but that was mainly in very extraordinary or unusual circumstances. The paperwork processing companies actually worked at pretty low profit margins.

My employer's cost per employee amounts to around $700 per month (not including what fees they pay the processor). If I lose this plan which now appears likely then who will pay the $700 per month? If that cost is transferred to the general premium paying, tax paying consumer then it looks to me like I have taken a hit for $1,400 per month not including the medicare tax increases that will follow.

We have been hosed.

Pardon my bad Engerlish abo... (Below threshold)
RicardoVerde:

Pardon my bad Engerlish above... I never notice til I hit "Submit".

Why do you think pe... (Below threshold)
SteveP:

Why do you think people buy stocks in a company?
Do you think they want the value of their stocks to go up or down or just have the money they invested remain static and have the buying power of it eroded through inflation?

Am I asking questions that are too difficult for you to understand?
How much money do you think insurance companies have to have when they are insuring people that may have to claim for operations and post-op care that costs $millions per policy?

Source

According to a study by a pro-health reform group published Thursday, the nation's largest five health insurance companies posted a 56 percent gain in 2009 profits over 2008. The insurers including Wellpoint, UnitedHealth, Cigna, Aetna and Humana, which cover the majority of Americans with insurance.

The insurers' hefty profit gains came even as 2.7 million more Americans lost their insurance coverage due to the declining economy.


Another:


Why Did Drug Companies and Insurance Companies Stock Prices Rise?

I have stock, Speller. But let me tell you this -- I don't have stock in Philip Morris. I don't have stock in KBR.

And as far as insurance companies are concerned, I wouldn't worry too much about their stockholders. They're doing just fine. Will do better when the companies get 32 million more customers.

Once again, this is not about making money. Unless you're a complete an utter moron (Spencer Pratt notwithstanding) you can always profit at one thing or another. Nobody's hindering the "poor healthcare companies."

The question is why conservatives - most who don't have a pot to piss in, many who are unemployed themselves - would be so dense as to support companies that would like nothing better than to screw them more.

I have an answer, but it's not a pretty one. It has to do with fear and ignorance. Fortunately, those of us on the left don't rule our lives by those markers.

658 billion to insure 32 mi... (Below threshold)
RicardoVerde:

658 billion to insure 32 million for the first six years. Roughly $20,500 each.

We have been hosed.

Yes, this unjustly attribut... (Below threshold)
SteveM:

Yes, this unjustly attributes the fix to Sebelius. Insurers actually made the fix by suggesting that they will not challenge a vaguely-worded provision that makes it unclear whether coverage has to be provided to children with pre-existing conditions.

SteveP:B... (Below threshold)
_Mike_:

SteveP:

But you are all gung ho about the health of companies that are making profit multiples that boggle the mind while denying the service they are charging to provide. Are you idiots? Maybe so.

"profit multiples that boggle the mind" ?

Using a public source such as 'Yahoo' for info... Coventry Health Care (CVH), one of the national largest insurers, shows a profit margin of 1.74%. For reference, Apple (AAPL) shows a profit margin 20.04%.

Despite Obama's demagoguery, the insurance companies aren't the problem, so unless you meant "mind boggling" thin margins, you ARE an idiot. So spare us the pretense that you're somehow better informed. You're not.

Coventry Health Car... (Below threshold)
SteveP:

Coventry Health Care (CVH), one of the national largest insurers, shows a profit margin of 1.74%. For reference, Apple (AAPL) shows a profit margin 20.04%.

Don't you people know what "facts" are:

Businessweek March 10, 2010:

Health insurance company shares have gained 71 percent in the past 12 months, as measured by the six-member Standard & Poor's 500 Managed-Care Index, led by the 124 percent increase for Coventry Health Care Inc. of Bethesda, Maryland. WellPoint, based in Indianapolis, is the biggest U.S. health plan by enrollment, and its shares have gained 80 percent. UnitedHealth, of Minnetonka, Minnesota, is second. Its shares have gained 61 percent over 12 months.

You were saying?

You people. You d... (Below threshold)
Lurking Observer:
You people. You do nothing but defend a healthcare service industry that finds every way till Sunday to benefit their bottom line and screw you.

This encapsulates the problem with liberals:

Liberals think it's a great thing to do pro bono work for al-Qaeda terrorists, even though they're trying to kill Americans.

But there's something fundamentally wrong with having anything nice to say on a blog about American insurance companies, if they think that they're trying to benefit their bottom line.

Sorry. That was a March 22n... (Below threshold)
SteveP:

Sorry. That was a March 22nd article.

SteveP:Profit marg... (Below threshold)
SteveM:

SteveP:

Profit margin is not equal to gains in shares.

Liberals think it's... (Below threshold)
SteveP:

Liberals think it's a great thing to do pro bono work for al-Qaeda terrorists, even though they're trying to kill Americans.

Can't really come up with a REAL rebuttle to any of the facts presented, LO, so this is what you have? And you wonder why we shake our heads at you people?

Coventry HealthCare<p... (Below threshold)
SteveP:

Coventry HealthCare

Gross Profit Margin 22.38%
Net Profit Margin 3.18%
Return on Assets 1.34%
Return on Equity 2.94%


And, from the same date as above:

Coventry Health Care is one of today's best performing stocks, up 1% to $26.51. The S&P is currently trading fractionally lower to 1,158 and the Dow Jones Industrial Average is trading fractionally lower to 10,733.

Profit margin is not equal to gains in shares.

They're doing just fine, it seems.

SteveP, your ignorance is s... (Below threshold)
_Mike_:

SteveP, your ignorance is showing - again. As SteveM pointed out, stock price is not profit margin. And it doesn't matter if it was a March 22nd article.

And as to whether or not "they're doing just fine", that has no bearing whatsoever on your false assertion that the health insurance industry is "making profit multiples that boggle the mind".

The fact of the matter is that the industry operates on a rather narrow margin.

As to my motive for arguing in against your assertion, I find the bogus solution don't solve problems. Your assertion that the "problem" with healthcare costs is the margins made by the insurance industry has been demonstrably proven false. Clinging to it only makes you look more ignorant.

Now, I would attempt to educate on how margins affect the investment of resources and hence improvement in quality and efficiency, but I'm certain it'd be beyond the grasp of someone who is incapable of distinguishing between margin, premiums, and stock price. I suggest you stick to keeping the crayolas inside the lines (i.e. your "ad biz").

Barry, Adrion and the 2 bit... (Below threshold)
914:

Barry, Adrion and the 2 bitter sock puppets known as SteveP and steve G can respectively stick the invoice straight up thier collective asses!

LISTEN UP LIBERAL TROLLS... (Below threshold)
klrtz1:

LISTEN UP LIBERAL TROLLS.

I'll tell you one more time why private Capitalism works better than Government. Businesses have customers. Bureaucrats have clients. Businesses try to keep their customers from going to other businesses. Bureaucrats are happy to have their clients go to other bureaucrats, they get paid the same regardless. Therefore Businesses try harder to give people what they want. Get it? Capitalism gives people what they want more often than Government.

And that's why I consider you socialists to be such damn fools. To turn your question around, "Do each of you liberals have a mind blowing amount of power over each and every government bureaucrat you deal with?"

That's why I know you don't really care about "the people".

Hypocrites.

You folks seem to ... (Below threshold)
SCSIwuzzy:
You folks seem to believe that EVERY business in existence would sell their mother to the wolves for a few extra bucks - and that, somehow, that's okay
-SteveP

There's your problem Steve. Rather than listen to people, or ask them honest questions and think about what they say, you prefer to tell them what it is that they think and believe.

As for Coventry or any other companies profit margin... what is the right amount? What is your company's profit margin? Is it above the health insurance avg (median) of ~3.7%?
Coventry's 1.73%? BTW, a quick look at Coventry doesn't paint them as some obscene profit monster, not with a double digit loss in income and earnings. 16.6% growth in revenue over 2009? 36.6% decline in earnings... bit of an offset there. CIGNA on the other hand... there's a balance sheet that's not too shabby at all. Neither represent the health of the industry though.

Is my company (not a health care company) problematic for having a net profit of 12.5% (5yr average)?

Steve Green,
Why is a 5% profit so bad? Regardless of it being 5% of thousands, millions, billions or trillions? What is the correct and acceptable level of profit? What is your profit margin?

SCSIwuzzy,You have... (Below threshold)
jim m:

SCSIwuzzy,

You have to realize that the libs believe that ANY profit is theft. It is money that the customer could have kept or it is money you could have paid an additional employee with. The idea that you should use profit to advance your own standard of living and that of the other owners is alien to them. Everyone should have the same standard of living. Even if that means everyone is in poverty (and one look at any communist society tells you that poverty is he endpoint of this ideal) that is better than income disparity.

Libs hate the idea that if you work hard you can improve your standard of living. If that is the case then it means that people are responsible for their own situations. Obama and the left have made it clear that they do not believe in hard work. They believe that luck alone is what determines whether or not you have success. That's what he implied when he told Joe the plumber that he wanted to spread his (Joe's) wealth around.

So if you don't make profit through hard work you either do it by theft or by luck. Either way in the mind of the leftist it is unmerited and you don't deserve to keep it.

NOTE to all you insurance c... (Below threshold)
Marc:

NOTE to all you insurance company haters, especially you steve[whatever] who claims to own a company:

This from The New Yorker, that if you don't know isn't exactly the last bastion of conservative thought in fact at best it's left if not FAR left in some of its leanings:

Take a medium-sized firm that employs a hundred people earning $40,000 each--a private security firm based in Atlanta, say--and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer's annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm's workers, if they didn't have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)
****
In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don't offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do?
Question posed steve whatever the friggin' hell you initial is, what are you gonna do?

P.S.As an addendum... (Below threshold)
Marc:

P.S.

As an addendum to the above, and because some of you nitwits hang all your hopes on CBO reports...

According to the CBO, somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it.


"According to the CBO, some... (Below threshold)
jim m:

"According to the CBO, somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it."

There are that may still employed? Who knew?

The CBO grossly underestimates the numbers who will be dumped on to the government plan. I think they expect employers to keep insurance coverage to make themselves appealing as employers. However, in a crappy job market people tend to be less picky if they have a choice between a paycheck and nothing. Also it will still be cheaper for an employer to pass back some of that savings to the employee in terms of salary rather than provide insurance. People remain primarily concerned with wages and that is where the advantage is. Put the employees on the government plan and cut them a small portion of the savings.

jim m,Also, those wo... (Below threshold)
SCSIwuzzy:

jim m,
Also, those workers that will most likely dumped will be entry level, unskilled labor and manufacturing jobs.
Steve Green, why do you hate these people?

It is indeeding telling whe... (Below threshold)
WildWillie:

It is indeeding telling when conservatives do not support Obamacare, that means we do not care about other people. Childish thinking no doubt. Conservatives believe regulation and the marketplace can correct any business. There is no doubt about that. Government does not, has not and never will have any program that is not rife with fraud and abuse. There is no doubt about that. The government has said many times in the past few decades that they will reduce wastefull spending and greatly reduce fraud but there is no doubt they did niether.

I flat out do not want government involved in healthcare and/or my medical records at all. Do you liberals actual believe the politicians would not use medical records for political gain. Or for a company to pay a hacker to get a hold of the records for potential employees, etc. You fellows line in la-la land. Both sides of the political system are screwed up. How can anyone, with a straight facee and half a brain say they trust elected officials to do the right thing by you? Wake up. Government is not your friend. The government does not have your best interests at heart, just their own. ww

The really FUNNY part is th... (Below threshold)
GarandFan:

The really FUNNY part is that the Democrats thought that once passed, they would not have to revisit health care. Now, due to their WONDROUS accomplishments in its creation, they'll be forced to revisit it each month when a new Ooops! comes up, or some business questions the meaning of what was written.

I think the new catch phrase will be along the lines of "We know you think you understand what we wrote, but what we wrote was not what we meant."

They must have shut down th... (Below threshold)
SCSIwuzzy:

They must have shut down the computer lab for spring break. Steve (G/P) have gone silent.




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