Ezra's reporting that the notion of the public option as Medicare buy-in is gaining steam.
Sources who have been briefed on the negotiations say that Medicare buy-in is attracting the most interest. Expanding Medicaid is running into more problems, though there's some appeal because, unlike increasing subsidies, expanding Medicaid actually saves you money. There's also ongoing discussion about tightening regulations on insurers, but I don't know the precise menu of options being considered.

The negotiations are fluid right now, and there's nothing close to agreement. But there is interest, and everyone remains at the table. The broader point is that the public option compromise is increasingly becoming a health-care reform compromise, and the focus is returning, usefully, to the goals of the bill. That's good for both moderates and liberals, as everyone who votes for this bill has a stake in seeing it work, and the intense attention to the increasingly weakened public option had begun to distract from the need to improve other elements of the legislation.
Looks like somebody figured out America already has a public option:  it's called Medicare.  Why not expand it to include pretty much everyone?

Now, how far this will go and how many red states will opt out, I have no idea.  But in the end, this juuuust might work.

Then again, it really may be a case of  "Why reinvent the wheel?"  Can't wait to see all the Republicans out there who are going to rail on about Medicare horror stories to try to scare people, because Medicare is so terrible and horrendous and hated...