The Obama administration has just announced that it will offer federally-sponsored health benefits to the public as part of the health exchanges due to open up in 2014:

These multistate plans were included in President Obama’s health care law as a substitute for a pure government-run health insurance program — the public option sought by many liberal Democrats and reviled by Republicans. Supporters of the national plans say they will increase competition in state health insurance markets, many of which are dominated by a handful of companies.

The federal health plans are run by private insurance companies, but the government can negotiate the benefits and premiums. So this move by the Obama administration is a far cry from a public option. But that didn’t stop one conservative from sounding the alarm.

Robert E. Moffit, a senior fellow at the conservative Heritage Foundation, said he worried that “the nationwide health plans, operating under terms and conditions set by the federal government, will become the robust public option that liberals always wanted.”

Although many on the left supported the public option, many single payer advocates vehemently opposed it, preferring instead an automatic expansion of Medicare to all Americans. So it’s telling that something far less than single payer would make Mr. Moffit a bit nervous. Why would he (and perhaps other free-market advocates) be so concerned that these private health benefits, under contract with the federal government, could suddenly morph into an entirely public plan? Maybe the idea of a public health plan has broader appeal than free marketers want to admit. The Government Employees Health Association, the organization that oversees federal employee health benefits, consistently gets high marks for patient satisfaction. And Medicare – a true single payer program – is immensely popular.

If large numbers of Americans end up choosing the federal plans in the health exchanges over other types of plans, that might take the steam out of a lot of anti-government rhetoric. If the majority of Americans find that they like their health benefits regulated by the government, it just might be easier for them to make the mental leap to accepting a system where health care is provided by the government. And that’s a very scary prospect for proponents of profit-driven health care.