Portland, Oregon (CNN) - Oregon's Democratic candidate for governor said Tuesday that President Obama's health care reform bill will be a "toxic" issue in 2012 unless states are given the opportunity to address the problem of rising medical costs.
Former Gov. John Kitzhaber, a physician and a lead architect Oregon's state run health program, is seeking his old job back this year after serving two terms from 1995 to 2003.
He narrowly leads his GOP opponent, former NBA player Chris Dudley, in recent polls - an unexpectedly tight race in a Democratic-leaning state that's become a top target for national Republicans.
Unlike other Democrats this cycle, Kitzhaber has not sought to distance himself from the president. To the contrary, Obama is coming to campaign for Kitzhaber on Oct. 20, nearly two years after he defeated John McCain by 16 points here in the 2008 presidential race.
But Kitzhaber said he would seek a waiver as governor to launch a "pilot project" to experiment with federal health care dollars and examine ways to reduce costs, and he suggested other states should do the same.
"I supported the passage of the bill but I think we need to recognize that this was really health insurance reform and not health care reform," he said in an interview over coffee at a Portland diner. "What it's done is provided most people in the country financial access to medical care by 2014. The problem is it didn't deal with the underlying cost drivers, and those are embedded in the delivery system."
He proposed creating a community-based risk pool that would focus on prevention and wellness in order to drive down the cost of treating chronic conditions.
"I think that the administration is going to be interested in that because I think this issue is going to be toxic in 2012 unless states can demonstrate that this isn't about spending more money," Kitzhaber told CNN. "This is about changing the system."
Kitzhaber predicted that the Obama administration will be "very interested" in granting waivers to states because by 2012, they'll be eager for new ideas about how to slow skyrocketing costs that are "really hurting" small businesses.
He also pointed to the "economic urgency" of baby boomers becoming eligible for Medicare, a scenario that will put "real fiscal pressure" on the administration to do something about costs.
Though Republican attorneys general around the country have filed lawsuits to block the implementation of health care reform, Kitzhaber dismissed their effort.
"They don't have answer," he said of Republicans. "Clearly health care is going to bankrupt the country, and it's fine to challenge the president's proposal if you have something to do on the table, but they're pretty bankrupt of ideas."
UPDATE: The Kitzhaber campaign issued a statement clarifying his comments and expressing support for the president's broader effort to reform the health care system.
"Republicans will attempt to tarnish the health care agenda and could succeed if there are not clear examples of success working with the states," Kitzhaber said. "I fully intend to make Oregon that shining example to prove the value of the President's reform efforts."