"As we said at the time, Obama's plan is a blueprint for socialization in stages. It starts with a basically good idea — setting up a truly national market (which we don't have now) for private insurance — and stacks the odds against the insurers by putting a tax-subsidized plan in the mix.
The private plans would have to be at least as generous as the public plan; this was stated explicitly by the Obama campaign. However, they would be denied its subsidy, so it would be impossible for them to match its benefits and still make money.
It would be like herding sheep into the fold and letting the wolf in. Or you can think of the public plan as a Trojan horse. Once allowed inside the gates of the health insurance market and given an unfair advantage, it will eventually out-compete its private rivals and gain monopoly power. "