Public Option Deficit Reduction Act This bill requires the Department of Health and Human Services (HHS) to offer a public health insurance option through health insurance exchanges. Unlike the coverage options currently available on exchanges, which are administered by private insurance companies, this public option must be administered directly by HHS. The public option must comply with the same general requirements as other plan types available on exchanges, including with respect to available benefits, benefit levels, provider networks, notices, consumer protections, and cost sharing. Medicare health care providers are automatically participants in the public option unless they opt out, and providers not participating in Medicare may opt in. In addition, the bill establishes requirements for setting premiums, payment rates, and provider incentives. The bill provides funding to establish the public health insurance option, which HHS must repay over 10 years.