Opponents of health care reform make the argument that if we had a free market in health care, costs would go down. They claim that "government regulations" are the reason that costs rise so fast--that and employer-supplied health care subsidized by tax advantages. So, the conservative proposals would involve removing the tax subsidy and removing all regulation of health care!
We've had a "free market" in healthcare; it's resulted in costs and premiums rising at three times the rate of inflation. The public option would restore competition in healthcare--or reduce costs, as has Medicare with its low overhead (2% vs 12% for private insurers).
Yes, Medicare is more expensive per member, but that's because the elderly need much more medical care. That's why the public option would cost significantly less per member. It would insure the non-elderly and the healthy as well as the sick.
Why are conservatives so afraid of requiring insurance companies to insure everyone regardless of "pre-existing conditions" or employment status? The only people who benefit from the current system are the upper-level execs of the health insurance industry. Even CEO's of companies in other industries know that the current system costs them much too much and makes their products uncompetitive on the world markets.
As for this whole mystique of "free markets:" we don't have free markets; we have corporate dominated markets, in which all other parts of the market system are subordinated to the profits of the largest corporations. And almost all sectors are oligopolies, i.e. imperfect markets.
And corporations are NOT democratic organizations: shareholders have very little power, except in extraordinary circumstances. CEO's overpay themselves with impunity because they can control shareholder meetings through their and their colleagues' shares. Most shareholders don't even vote their proxies, except the way the board of trustees directs. And consumers can't "go elsewhere" if they feel that a corporation is unfair; they all are--and have to be if they're in competition with other corporations.