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Will Insurers Ever Say Enough’s Enough To Obamacare? How can anyone run a business this way?
The Federalist ^ | December 27, 2013 | Greg Scandlen

Posted on 12/27/2013 8:56:09 PM PST by 2ndDivisionVet

I’ve been working professionally in health policy since 1979 when I was hired to write the consumer contracts and other communications in plain English for the Blue Cross Blue Shield plan in Maine. I neither knew nor cared anything about health care before that.

Rewriting contracts turned out to be a pretty good way to learn a whole lot about the business very quickly, I went from there to the research department and then to government relations. Before I left the Blues I was heading the state relations department for the national association in Washington. Then I went on to organize a trade association of health insurance companies that were interested in promoting free market solutions in health care.

I was surprised at how naïve the executives of these companies were when Clinton proposed his own health reforms. These were quiet, unassuming people who were happy to pool risks and pay claims and feel good about their work. They never expected to become the villains in Hillary’s ambitions, had never been political, and didn’t know how to cope with it.

So, understand that I am a man of the insurance industry. I am not a lawyer, have never worked for any government or politician, not an economist, don’t have an advanced degree in any field, and obviously have never cared for a patient. My sole qualifications are that I’m a good writer and a dogged researcher.

What has happened to the insurance industry has me stunned.

Now, I am no apologist for the industry. I have been one of its biggest critics. Its dalliance with Managed Care after the demise of ClintonCare was an enormous mistake that took its mission away from financial protection into health services management – something it was never qualified to do. The industry not only did a poor job of it, but it alienated and embittered the only people who really matter in health care – doctors and patients.

Granted, Managed Care pleased employers for a few years. It restrained their costs in the mid-1990s. But employers don’t really know anything about health care, either. What they do know is the morale of their workers, and Managed Care was the biggest morale-killer ever. Employees were furious that care was being denied by insurance company bureaucrats in Hartford, Connecticut, and they let company HR departments know it.

Employers started looking for other ways to restrain costs while preserving patient choice, and came to embrace “consumer-directed” health care (CDHC) in the early 2000s. This approach has been enormously successful and has exceeded the expectations of even its advocates like me. It has lowered costs and increased patient involvement in health care decision-making.

As an insurance guy, I liked that it was moving insurers away from their misguided notion of being the big boss in health care and back to the role of financial protection.

But the industry didn’t much like that aspect of it. Sure, they would sell the products because employers demanded it, but they were losing control as banks entered the market to manage the first few thousand dollars of expenses of a patient’s contract. The banks were still focused on financial protection and didn’t have ambitions to become health care managers.

So when Obama came along with an offer to require all Americans to buy their products, it was an offer they couldn’t refuse. Especially when the products he had in mind were comprehensive, cover-everything health plans. No more bank involvement. We’ll really be in the catbird seat now!

The naivety I had witnessed during the Clinton Wars was still in force. Many of us tried to warn the industry that they would regret this arrangement. Yes, they might be assured of modest profits, but the cost of sacrificing their autonomy would be far too high. They would become little more than public utilities. They would lose all control over benefit design, marketing practices, and rate setting. They would have no idea of the risks they were enrolling and would have to set premiums blindly.

It has become much, much worse than I ever imagined. Obamacare is not even fully in effect yet and already we are seeing the President playing with the carriers like a toddler plays with toy trucks –

•Employers will be mandated to buy your policies for 2014
•(Oops, employers are angry)
•Employers won’t be mandated until 2015 – if then
•Small employers will give workers a choice of health plans through the SHOP program in 2014
•(Oops, we can’t get the web site ready in time)
•Small employers won’t have to offer a choice of plan until – sometime later
•You must cancel these individual policies
•(Oops, public backlash)
•You must reinstate these policies
•(Oops, many insurance commissioners won’t allow it)
•You must continue to cover providers and drugs even for cancelled policies
•The deadline for enrollment will be December 15, 2013
•(Oops, web site problems)
•The deadline for enrollment will be December 23, 2013
•(Oops, too much traffic)
•The deadline for enrollment will be December 24, 2013
•Never mind, there is no deadline
•First month’s premium must be received by December 31, 2013
•(Oops, back-end problems with the web site)
•First month’s premium must be received by January 8, 2014
•Make that January 10, 2014

How can anyone run a business this way? This is worse than being a federal agency. No federal agency would be expected to stop and start on a personal whim like this. These aren’t rules, they aren’t regulations, they are dictates based on nothing more than Kathleen Sebelius’ momentary feelings.

These are only the “glitches” that have been made public. God knows what orders and threats are being issued in closed-door meetings.

How long will the insurance industry abide being treated like shoe shine boys? Mr. Obama will not be in office forever. His regime is already coming to an end. What will these companies do then? He will no longer be around to grant or withhold bailout (“risk corridor”) money. No other president, Democrat or Republican, will ever be as arrogant or irrational.

It is well past time for the industry, supposed Titans of Wall Street, to grow some spine and start thinking about the best interests of their customers and shareholders.


TOPICS: Business/Economy; Culture/Society; Government
KEYWORDS: economy; insurance; obamacare; socializedmedicine

1 posted on 12/27/2013 8:56:09 PM PST by 2ndDivisionVet
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To: 2ndDivisionVet

I guess it helps when it’s written into the law that ins co’s will be reimbursed for 80% of the loses due to 0care.


2 posted on 12/27/2013 8:59:03 PM PST by Paulie (Buy local, bank local, exert your influence locally; the left will fold like a cheap suit.)
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To: 2ndDivisionVet

Insurers are at legal risk if they follow Obama’s direction to break the law.

They can still be sued for not providing mandated benefits, similar with employers.


3 posted on 12/27/2013 8:59:48 PM PST by sickoflibs (Obama : 'If you like your Doctor you can keep him, PERIOD! Don't believe the GOPs warnings')
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To: 2ndDivisionVet
It is well past time for the industry, supposed Titans of Wall Street, to grow some spine

Not going to happen in the fascist state that used to be the American Republic. Truly, this is a fascist government.

History is repeating itself for everyone to see, and very few people even have a clue it is happening. This country is so, so screwed.

4 posted on 12/27/2013 9:03:48 PM PST by ChildOfThe60s ((If you can remember the 60s.....you weren't really there)
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To: Paulie

There is no incentive for them to rock the boat.


5 posted on 12/27/2013 9:08:17 PM PST by DonaldC (A nation cannot stand in the absence of religious principle.)
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To: 2ndDivisionVet

Good luck with that.


6 posted on 12/27/2013 9:08:25 PM PST by Jeff Chandler (Obamacare: You can't make an omelette without breaking a few eggs.)
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To: Paulie

0DeathCare is awash in payoffs.


7 posted on 12/27/2013 9:10:42 PM PST by Jane Long (While Marxists continue the fundamental transformation of the USA, progressive RINOs assist!)
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To: Paulie

It sounds like a sweet deal for insurance companies. I bet they’re licking their chops ... just in anticipation of the huge profits they will make, thanks to Obama!


8 posted on 12/27/2013 9:17:13 PM PST by Star Traveler (Remember to keep the Messiah of Israel in the One-World Government that we look forward to coming)
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To: Paulie

“Affordable” becomes more unaffordable by the day.


9 posted on 12/27/2013 9:26:32 PM PST by MtnClimber (A Foolish Faith In Authority Is The Worst Enemy Of The Truth - Albert Einstein)
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To: 2ndDivisionVet

I think there are two sides to this question, a carrot and stick so to speak.

On the one hand the Insurers know that if they don’t rock the boat and play along they’ll either get massive federal bailouts and/or enormous profits once every productive American is coerced into overpaying for health insurance.

On the other hand, the Federal government regulates these companies, and for many of them it is their biggest customer through Medicare and other programs.

What businessman would be anxious to tell their regulator and biggest customer to go to hell when saying nothing had an assured payoff?


10 posted on 12/27/2013 9:37:17 PM PST by Junk Silver
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To: 2ndDivisionVet
Will Insurers Ever Say Enough’s Enough To Obamacare?

The insurance companies are part and parcel to this Obamacare Kabuki theater show.

11 posted on 12/27/2013 9:54:01 PM PST by VideoDoctor
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To: Star Traveler; All

Republican or Democrat, do you think anything big gets done if some big business sector does not favor it.


12 posted on 12/27/2013 10:03:08 PM PST by gleeaikin
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To: 2ndDivisionVet

Basic reason for insurance is to fund high tech medicine.

40 years ago, you got a heart attack, you just died.

So now you get open heart surgery.

After the first and second quarter, Insurance companies will freak. Losses will pile up, premium will dry up, doctors will quit. Doctors will not take Obama care because of the high deductible. They know they won’t see a penny.

Business’s are next.

We may be looking at the collapse of hospitals in 2014.
Hightech medicine, gone with the wind.


13 posted on 12/27/2013 10:06:44 PM PST by PA-RIVER
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To: sickoflibs
Insurers are at legal risk if they follow Obama’s direction to break the law. They can still be sued for not providing mandated benefits, similar with employers.

Never happen. Obama has got their backs. They are partners in crime. The insurance companies are willing partners in Obamacare. They spent tens of millions of dollars pushing it and the insurance companies had a major role in writing the bill. They protected themselves.

14 posted on 12/27/2013 10:15:23 PM PST by kabar
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To: 2ndDivisionVet
How long will the insurance industry abide being treated like shoe shine boys? Mr. Obama will not be in office forever. His regime is already coming to an end. What will these companies do then? He will no longer be around to grant or withhold bailout (“risk corridor”) money. No other president, Democrat or Republican, will ever be as arrogant or irrational.

The author of this article is delusional. The Dems will do whatever is necessary to preserve Obamacare. Hillary will be just as ruthless as Obama when it comes to using executive power to control the outcome.

15 posted on 12/27/2013 10:18:40 PM PST by kabar
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To: Star Traveler

The people really cleaning up here are the contractor data analysts and systems programmers, who are no doubt working 80-hour weeks keeping up with this. It must be like Y2K every day!


16 posted on 12/27/2013 10:26:48 PM PST by The Antiyuppie ("When small men cast long shadows, then it is very late in the day.")
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To: PA-RIVER

I have invested heavily in Johnson & Johnson (Band-Aids) and an up and coming product segment...”doctor kits”...for adults!


17 posted on 12/27/2013 10:29:21 PM PST by The Antiyuppie ("When small men cast long shadows, then it is very late in the day.")
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To: kabar

I’m still convinced that Obama and his cronies designed the whole ACA to fail. The numbers just do not work, and they are making it so chaotic that nobody can figure it out. Give it a year or so and he’s going to throw up his hands, blame the mess on the greedy insurance companies for not playing ball, and the Republicans for trying to block him, being racists, hating woman, children, the poor, and etc., and instate single payer by executive order. Mark my words.


18 posted on 12/27/2013 10:36:56 PM PST by SirFishalot
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To: SirFishalot
No, because the fact is that no one is buying the product, it is just that simple.

Obama isn't going to be able to lay this on anyone else, it is his baby.

19 posted on 12/27/2013 10:40:37 PM PST by fortheDeclaration (Pr 14:34 Righteousness exalteth a nation:but sin is a reproach to any people)
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To: 2ndDivisionVet

A monopoly can be overcome by the free market. Until there is competition, there is failure.


20 posted on 12/27/2013 10:42:51 PM PST by VRWC For Truth (Roberts has perverted the Constitution)
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To: The Antiyuppie

They all live in india now


21 posted on 12/27/2013 10:54:29 PM PST by kvanbrunt2 (i don't believe any court in this country is operating lawfully anyway)
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To: 2ndDivisionVet
No other president, Democrat or Republican, will ever be as arrogant or irrational.

I wouldn't count on that...

22 posted on 12/27/2013 11:03:13 PM PST by ArmstedFragg (hoaxy dopey changey)
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To: kvanbrunt2
They all live in india now

Nope, they are Indian programmers working in Canada for the Canadian outfit who received lions share of contract to build the web site. It helps that a VP in that Canadian outfit is college friend of FLOTUS, Michelle.

23 posted on 12/27/2013 11:07:28 PM PST by entropy12 (Great republics wither when more people figure out they can get free stuff by electing socialists.)
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To: kvanbrunt2
They all live in india now

Nope, they are Indian programmers working in Canada for the Canadian outfit who received lions share of contract to build the web site. It helps that a VP in that Canadian outfit is college friend of FLOTUS, Michelle.

24 posted on 12/27/2013 11:07:28 PM PST by entropy12 (Great republics wither when more people figure out they can get free stuff by electing socialists.)
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To: 2ndDivisionVet

Another provision to add is that the policies are total POS.

Just perused the NYS ones and they are largely useless with high deductibles. 50% copays on virtually everything and no out of network coverage whatsoever.

I’d rather go for a catastrophic plan to at least prevent a bankruptcy from a hospital stay but those are no longer allowed.


25 posted on 12/27/2013 11:09:13 PM PST by headstamp 2 (What would Scooby do?)
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To: 2ndDivisionVet
The insurance companies will do nothing. As Sam Spade said, "you'll take it and like it." Obama punishes anyone he perceives as an enemy and he has a politicized HHS, IRS and SEC to do it with. Plus, their only hope for survival is the federal bailouts embedded in Obamacare. They were idiots to think the economics of Obamacare could ever work.

They will have to limp along this way until Obama decides it's time to discard them for single payer.

Their only hope for survival is a Republican victory that repeals Obamacare and installs a deregulated system. But the moment they support that, the IRS and FEC will be on them like white on rice. They are well and truly screwed and only have themselves to blame.

26 posted on 12/27/2013 11:10:31 PM PST by colorado tanker
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To: 2ndDivisionVet

HMOs were the worst plan to ever come down the pipe. You couldn’t get in even to see a doctor. They are also the real reason the Doctors of United Healthcare quit(they were not fired). I believe they and their patients were very happy with the PPOs; but meddling ended that.

I wonder how people are going to feel when they discover they have no healthcare much less coverage. That is exactly what Obamacare is designed to do.


27 posted on 12/28/2013 12:42:51 AM PST by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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bookmark


28 posted on 12/28/2013 1:58:24 AM PST by freds6girlies (many that are first shall be last; and the last shall be first. Mt. 19:30. R.I.P. G & J)
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To: 2ndDivisionVet
"Will Insurers Ever Say Enough’s Enough To Obamacare? How can anyone run a business this way?"

IIRC, under Obamacare, insurers' profits are limited to a percent of sales. They can't increase profits by delivering a higher quality product at a lower cost. They can increase profits by producing an inferior product at a higher cost.

If here was ever an economic scheme designed with its incentives backwards, this one is it. But no, why would insurets say "enough"? The US spends about 17.6% of GDP on health care. The way for insurers' profits to double is to go along with Obamacare, and let the US spend 35% of GDP on health care.

It's the consumers who should be grabbing their torches and pitchforks!

29 posted on 12/28/2013 3:36:02 AM PST by Sooth2222 ("Suppose you were an idiot. And suppose you were a member of congress. But I repeat myself." M.Twain)
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To: ArmstedFragg
No other president, Democrat or Republican, will ever be as arrogant or irrational.

>>I wouldn't count on that...<<

Agree. Obama established awful precedents that disemboweled our constitution. They will be there, sitting on a shelf, ready for use by future tyrants. Unless we act fast, it is adios to the great American, republican experiment.

30 posted on 12/28/2013 4:28:59 AM PST by Jacquerie (To restore the 9th & 10th Amendments, repeal the 17th.)
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To: 2ndDivisionVet

Socialists complaining about totalitarians? Who’da thunk it?


31 posted on 12/28/2013 5:08:47 AM PST by PGalt
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To: sickoflibs

In regards to the driving force behind the “Patient Protection and Affordable Care Act of 2010 - all this law says to me is that I have to pay some company a few hundred dollars a month for the right not to be a criminal in the territory once known as “the United States of America”.

The insurance companies that still will be writing “health insurance” coverage will soon find themselves skirting at the very edge of economic disaster, if not already subject to criminal prosecution.


32 posted on 12/28/2013 5:23:16 AM PST by alloysteel (Those who deny natural climate change are forever doomed to stupidity. AGW is a LIE.)
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To: Star Traveler
The insurance industry has supported Socialized Medicine for decades.
33 posted on 12/28/2013 5:53:37 AM PST by Eric in the Ozarks ("Say Not the Struggle Naught Availeth.")
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To: fortheDeclaration

He will try to blame insurance companies and republicans.

Insurance companies are going to take it up the azz. They will spend 2 dollars on back office clerical work for every dollar in premium first quarter, then start making an avalanche of claim payments. By September’s they will announce that that are not participating in 2015. That’s when Obama will have Holder start screwing them.


34 posted on 12/28/2013 6:09:40 AM PST by PA-RIVER
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To: 2ndDivisionVet

The Dictators in the Democrat Party will make all the decisions about our healthcare. We will be bullied and forced to like it.


35 posted on 12/28/2013 7:02:16 AM PST by FreedBird
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To: VideoDoctor

America keeps getting in the government vs business is the enemy fight when they are working together against us all.


36 posted on 12/28/2013 7:06:17 AM PST by bmwcyle (People who do not study history are destine to believe really ignorant statements.)
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To: 2ndDivisionVet

How can anyone run a business this way?

There is what they may regard as an upside to wit: I, who have never purchased health insurance must now do so by law or suffer fines...


37 posted on 12/28/2013 7:45:18 AM PST by TalBlack (Evil doesn't have a day job.)
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To: ChildOfThe60s

“It is well past time for the industry, supposed Titans of Wall Street, to grow some spine”

Forty years of PC conditioning ensures their continued silence. THAT was always the true point of PC.


38 posted on 12/28/2013 7:50:53 AM PST by TalBlack (Evil doesn't have a day job.)
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To: colorado tanker

“Their only hope for survival is a Republican victory that repeals Obamacare and installs a deregulated system”

Boy, you think a lot of those Republicans!


39 posted on 12/28/2013 8:35:55 AM PST by Jim Noble (When strong, avoid them. Attack their weaknesses. Emerge to their surprise.)
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To: 2ndDivisionVet

Thanks for posting.

I just included that ...

I created a site last week for factual stories about Obamacare that don’t see the light of day in the MSM, where they hate a fact almost as much as humblegunner hates a blog pimp.

It’s not a blog, it’s a news aggregation site like Drudge or RCP, but dedicated to Obamacare solely. So it’s not an ode to my wonderful thoughts and feelings, and hence, I will not post them here.

At the risk of waking the HumbleGiant, does anyone object if, within this thread rather than as its own obnoxious vanity, I note the site?


40 posted on 12/28/2013 8:36:43 AM PST by tinyowl (A = A)
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To: Jim Noble

I’m addicted to disappointment.


41 posted on 12/28/2013 1:05:39 PM PST by colorado tanker
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To: PA-RIVER

Yes, probably try to nationalize them.


42 posted on 12/28/2013 1:32:09 PM PST by fortheDeclaration (Pr 14:34 Righteousness exalteth a nation:but sin is a reproach to any people)
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To: 2ndDivisionVet

NO. Never.

They’ll get their money, and when they go broke, they’ll get their bailouts, and when the government takes it all over they’ll get their cushy government jobs while the shareholders get screwed.


43 posted on 12/28/2013 4:50:49 PM PST by Organic Panic
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To: 2ndDivisionVet; a fool in paradise

The ‘naivete’ that the author refers to is not of the insurance companies and their executives, but of those like himself, and many others, some of them here, who expect the insurance companies, and the guitar companies like Gibson, and Google and Microsoft to lead the revolution that they can watch from their ergonomical keyboards. The law was passed by duly elected representatives of the people, signed by the Indonesian president, it is “the law of the land”, and businesses abide, as they must. Period, to quote the Indonesian.


44 posted on 12/28/2013 4:58:29 PM PST by Revolting cat! (Bad things are wrong! Ice cream is delicious!)
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To: 2ndDivisionVet

Thanks! Very interesting article. Sad, though.


45 posted on 12/28/2013 5:06:29 PM PST by St_Thomas_Aquinas ( Isaiah 22:22, Matthew 16:19, Revelation 3:7)
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To: The Antiyuppie
The people really cleaning up here are the contractor data analysts and systems programmers, who are no doubt working 80-hour weeks keeping up with this. It must be like Y2K every day!

Wow! I happened to speak to one of those guys a few weeks ago, and you're right. He hates Obamacare, but is loving the money right now.

46 posted on 12/28/2013 5:11:40 PM PST by St_Thomas_Aquinas ( Isaiah 22:22, Matthew 16:19, Revelation 3:7)
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To: entropy12

ours are in india


47 posted on 12/30/2013 9:17:16 PM PST by kvanbrunt2 (i don't believe any court in this country is operating lawfully anyway)
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