Image: Tennessee Gov. Phil Bredesen
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Critics says Gov. Phil Bredesen, D-Tenn., made the biggest cuts in public health insurance in the nation's history, making him the wrong man to head the Department of Health and Human Services.
updated 2/10/2009 3:12:45 PM ET 2009-02-10T20:12:45

Few governors know the pitfalls of soaring health costs better than Tennessee Gov. Phil Bredesen, which helps explain why President Barack Obama is reportedly considering the Democrat for health secretary.

In 2005, Bredesen cut 170,000 adults from Tennessee's Medicaid program, called TennCare. He reduced benefits for thousands more.

Critics describe Bredesen's actions as the biggest cuts in public health insurance in the nation's history. They believe he's the wrong person to lead an effort to expand health insurance coverage, and they're throwing support behind other candidates, including Kansas Gov. Kathleen Sebelius, widely viewed as near the top of Obama's list of candidates to run the Health and Human Services Department.

However, some say Bredesen's stand shows he's willing to tackle the toughest of problems.

Before the cuts were made, TennCare's growth rate was making it harder to pay for education, roads and other critical services. Tennessee led the nation in the percentage of its population on Medicaid and the percentage of its budget going to Medicaid. However, on a per-person basis, Tennessee ranked 48th in state and local tax collections.

Dennis Smith, now a senior fellow at the Heritage Foundation, was in charge of Medicaid at the federal level in 2005. He said Bredesen's actions were "necessary and appropriate" because the program was out of control.

For example, almost every state has some type of system that allows it to approve the amount and types of prescription drugs that beneficiaries get. Tennessee didn't have such controls. Eligibility rules were also much broader than those of other states, allowing for enrollment of adults who would not have been eligible for Medicaid elsewhere.

'Distortion of events'
The most praise for Bredesen comes from conservatives. Obama has shown a willingness to consider their views in his appointments so far, while many of those on the left of the issue say Bredesen is the wrong choice.

Bredesen emphasized in an interview Tuesday that he hasn't applied for the HHS job or campaigned for it. But he has launched a counterattack against health care advocates for what he calls a distortion of the events that led to the TennCare cuts in 2005.

"Your name comes out and the next thing you know, people are dumping cans of garbage on you," he said. "So I'm interested in, first of all, setting the record straight."

Video: Todd: White House 'shell-shocked' Bredesen said the move to cut the number of TennCare enrollees came after advocates "absolutely pushed me to the brink" by blocking other proposals to rein in the costs of the program that was expected to grow by $680 million in just one year.

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"Their mantra was, you can do anything you want, but you can't reduce any benefits and you can't remove any people," he said. "They fought me every step of the way on ideological grounds, and basically pushed us to the point where we had no alternative to take some drastic action."

The governor also downplayed the potential problem of having to work with groups who so vigorously opposed him. More important players will include pharmaceutical companies, hospital, doctors and medical equipment manufacturers, he said.

A coalition of 'real people'
"What's going to have to happen is not putting together a coalition of liberal advocacy groups for health care, but a coalition of real people who are sitting here on one-sixth of the U.S. economy and try to find some common ground," he said.

In some respects, Bredesen sounds like former HHS Secretary Mike Leavitt when describing his philosophy for reforming health care.

"I certainly believe there's an underlying right and the federal government ought to be financing a basic level of health care for everybody," Bredesen said.

Bredesen's emphasis is on the word basic. Leavitt repeatedly stressed the same emphasis. He listed as his top priority that "every American has access to basic health insurance at an affordable price."

Bredesen met with Obama for the first time in his Washington office shortly after Obama announced he would seek the Democratic nomination for president in 2007.

Bredesen in 1980 founded a health maintenance organization called HealthAmerica Corp., which became the country's second-largest HMO before he sold it in 1986 for about $400 million.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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