The thing I don't understand about healthcare reform

[BattyDem]

You will be able to choose between private insurance plans and the public option. If you don't have insurance and/or can't afford to buy it, the government will subsidize the cost.

Well ... if they subsidize the cost of a private insurance plan, that means tax-payer dollars are going to go directly to the health insurance companies, which does nothing to increase the quality of care. Why give money to a third-party, private company when the government already has its own insurance plan: Medicare. Doesn't it make more sense to expand Medicare and let that be the public option? Those who buy in to the system can choose between private companies and Medicare (public option). Those who are subsidized can automatically be placed on Medicare, which would save the government money, because it's not a "for profit" system, and prevent tax-payer dollars from going directly to insurance companies.

On the plus side, they already know that Medicare works (though it's not perfect), they wouldn't have to spend money setting up a new insurance plan or bureaucracy and thousands of providers already accept Medicare. Why is this simple (and obvious) solution being ignored? What would be the downside to doing this?