Am I dreaming, or are both swine flu and the healtcare reform backlash in retreat?

Probably dreaming.

But these the rise of the public option and the fade of the flu sometimes seem so real.

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A more relevent 'opt-out' for the states would be if they could decide to forgo the increases in Medicaid spending in the Senate bill that aren't fully covered by the Federal government. States already have been paying ever increasing amounts for Medicaid. They don't need more mandated spending at a time when they are cutting back on education to keep themselves afloat. Unless, of course, your state's senator is a powerful Democrat. Then they don't have to worry.