BOISE - Democratic gubernatorial candidate Keith Allred said Wednesday that the best way for Idaho to get out from under the new federal health care mandates would be for the state to design its own plan for providing insurance and for controlling rising medical costs.

Allred also took a shot at Republican Gov. Butch Otter for authorizing the state to sue the federal government over the provision in the health care overhaul requiring people to buy insurance.

Otter's response simply spends money on a legal fight few expect Idaho can win and does nothing to slow the rising costs of medical care and insurance premiums, Allred said.

"Most experts give the lawsuit little chance of success. And I haven't found anyone who thinks it will solve the health care problem," he said.

Allred unveiled his plan for homegrown health reform on the same day Otter formally announced his bid for a second term. Otter has been raising money for more than a year and last month filled top positions on his campaign team, but had held off making his re-election intentions official.

Otter campaign manager Debbie Field said Otter is confident the legal challenge is the best course for the state and the 17 others that have joined the lawsuit. Challenging the federal requirement that the uninsured buy coverage or face penalties also has the backing of the state's Republican dominated Legislature.

"He knows exactly what he's doing," Field said at the end of a campaign kickoff tour that included stops in Post Falls, Lewiston and Caldwell. "And the governor is widely supported on the idea that Idahoans should be in charge of health reform."

Allred says he shares the belief that Idaho should set its own agenda for reforming the health care system, but his strategy works within the framework of the new federal law.

A section in the federal law allows states to seek a waiver from some of the federal mandates. But states seeking to opt out must first develop a plan that can pass federal muster, including providing insurance that is affordable, covers as many people as the federal plan and doesn't add to the federal deficit.

Allred says his blueprint could include a state-run public option designed to compete with private insurance providers or creating a health insurance exchange system that allows businesses or individuals to join pools to better compete in the market.

If Idaho can make its insurance market more competitive and affordable, Allred says the state can request a waiver from the mandate requiring individuals to buy their own coverage. Approval of an Idaho plan by federal agencies would also make the state eligible to receive federal money to subsidize coverage for low-income families.

"I believe that Idaho can do a better job than the federal government," Allred said. "I know that we can solve the problem better than lawyers and federal judges."