Legalize marijuana. The cost savings alone from the clearing out of the judicial system and a draw down in our "troops" abroad in the "war on drugs" would probably pay for a low cost, bare-bones government funded option. Add a sin tax on top of it, and it could probably fund a pretty decent program. Domestic production would stimulate the economy and create jobs, and keeping with agricultural tradition, we'd allow imports but impose a hefty tariff, which would also be directed towards the government option.
I think we'd also see a drop in a lot of the prescription drug costs, because who needs Prozac if you can just get stoned?