Gov. Phil Bredesen (search) announced Wednesday that the state plans to dissolve TennCare (search), cutting up to 430,000 people from the financially troubled supplemental Medicaid (search) program.

The governor held out some hope for saving the program, announcing that he will try for seven more days to work out an agreement with legal advocates who have won several court decisions about the level of health care the state must provide to the 1.3 million TennCare enrollees.

Bredesen ran for governor years ago with a promise to fix TennCare, whose $7.8 billion price tag was projected to mushroom in coming years, or to end it.

"It pains me more than I can describe to take this path," Bredesen said during a news conference. "This is not what I planned for or what I dreamed about doing as governor."

TennCare provides health care coverage for the poor, uninsured and disabled, covering 1.3 million Tennesseans, or about 22 percent of the state population.

The Legislature overwhelming approved Bredesen's plan to overhaul the program last session, and it had been presented to federal officials for approval. The reform would have cut some benefits and required co-payments from some of the expansion population while slowing growth in costs.

In the past, all TennCare participants had unlimited doctor visits and prescriptions. Bredesen wanted to limit 270,000 of them to only 12 doctor visits a year, 45 days in the hospital each year, eight outpatient hospital visits a year, 10 lab procedures or X-rays a year, and six prescriptions a month.

Bredesen has blamed TennCare's problems on lawsuits brought by advocates of enrollees, who have won multiple court decisions which Bredesen says force costly coverage.

The governor also said it was unlikely an agreement could be reached with the advocates in the next seven days.

Gordon Bonnyman of the Tennessee Justice Center, who has led much of the court battle, said he and other advocates are being blamed unfairly. He said they are working with the governor, but don't agree with all his changes.

With no changes to TennCare, spiraling health care costs could eat up as much as 40 percent of the state budget by 2008, according to an independent study.

A basic Medicaid program would save the state about 20 percent, although it would also lose federal matching money. State Finance Commissioner Dave Goetz said he's not sure how much money the state will save.

"Part of what we're trying to do right now is figure what the wind-down process will be," Goetz said.

Bredesen said there's a 60-day notification period to go through to kill the program, launching a complex federal approval process. Enrollees would have six months before TennCare disappears, Goetz said.