The public option in health care reform

I've been reading and thinking a lot more about health insurance reform lately and have actually started to reach some conclusions. One of what seems to me (though not to many others) less important dimensions of reform is whether or not to have a "public option" competing with private insurers. Economists Greg Mankiw and Richard Thaler say pretty much what I would have said had I written a long post about this. I think you can sum it up as: if the public option does not receive government subsidies or other competitive advantages, it will not do well in the market and so does not matter much. If it is subsidized, then it is just a stalking horse for a single payer system and should be avoided. If we are to have a single payer system then we should have it after an honest debate.