USA already has other public options: public schools and USPS Priority Mail over private schools and UPS 3 Day Select.
My signature points out that the United States has a history of public and private sectors competing in a given sector. For example, an engineering student in Indiana can go to Rose-Hulman Institute of Technology (private), or she can go to Purdue University (public). An online hobby store can ship packages to customers with United Parcel Service (private), or it can ship them with United States Postal Service (semipublic, funded by an exclusive contract with the US Government for mailing letters).
As of the third quarter of 2009, health insurance for United States residents under age 65 is mostly provided by employers, who make insurance available to their employees. But not all employers are large enough to qualify for group insurance plans, and some employers even restrict employees to part-time hours so that they don't have to offer coverage. Some insurers offer individual plans, but these are known for refusing to cover people with any of several sorts of preexisting conditions. Estimates of the number of documented U.S. residents without health insurance range from 8 million to 47 million.
The legislature of the United States, called the Congress, has recognized that the lack of universal coverage is holding America back compared to other highly-developed countries. Its members have been debating whether to form a public health insurer to compete with private insurers; this hypothetical insurer has been nicknamed "Public Option" or "Obamacare" in the news media. Some more fiscally conservative members of the Congress argue that any public option would distort the market, and people would leave their current plans and end up on Obamacare. Yes, some people will switch from their current insurer to Obamacare, but that's to be expected: people switched from UPS 3-Day Select when USPS introduced flat-rate shipping boxes.
And the so-called "death panel" is actually called iMac.