Policymakers are divided on whether or not a "public option" should be included

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Policymakers are divided on whether or not a “public option” should be included in the overall reform plan. Proponents argue that insurance companies do not really compete with each other and a government-run plan is the only way to ensure competitive markets.
What are proponents of the public option hoping that competition will accomplish?
What are the essential factors that must exist for a new rival to increase competition in any market? Do these factors exist in this case?
Name several examples of markets where the government competes directly with private firms.
Do you think a government option will increase competition in the insurance market?

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