That's true. The Congressional Budget Act of 1974 spells out very clearly what can and cannot be passed under the rules of Budget Reconciliation. The so-called "public option", doesn't come anywhere near meeting those rules, IMHO. I really don't think it will make it past the parliamentarian, but anything is possible in corrupt DC.
That's the thing. They already passed the public option late last year. The "reconciliation" comes where they pass a bill that would "downgrade" what they passed into something palatable for the House to pass by simple majority (after they pass the Senate bill, in quick succession).