There is nothing wrong with the public option. Hell, it doesn't even have to be government administered. We should be allowed to pool together into private insurance groups free from our employer based health care.
In all honesty, I do think that the mandate is unconstitutional. I think it's a huge over reach of the commerce clause. Who is to say that next the government says you have to buy a certain brand of toothpaste because it's the healthiest? That's the logical progression of the individual mandate.
I agree that if you aren't financially able to cover the state minimum requirements for another person's medical bills and or property due to an accident, then you should be required to carry minimum insurance. That is only because you pose a threat to others. However, requiring everyone to purchase insurance despite the fact that they have the means to pay for someone else's care if they injure them is nothing more then a hand out to the insurance companies.
In regards to insurance premiums going up due to those without insurance, if we had a public option that made health insurance affordable for people, even lower income people, then we wouldn't see premiums rise like they do. Insurance premiums rise like they do because most insurance companies operate in a monopoly fashion. Sure rising health care costs play a part in it, but it's more due to the lack of competition and the people's inability to join group plans together across state lines. Competition between insurance companies is pretty much nonexistant.