By Marcus Pickett

As the federal government prepares for a fight over funding of health care reform, the states are reacting in their own ways. Some are resisting the federal law's mandates and provisions. Others are getting a head start on health care reform by spearheading their own initiatives that dovetail with the federal law.

These state-by-state developments provide insights into what health care and health insurance might look like when most of the federal reforms go into effect in 2014.

For those who want to prepare themselves financially -- including their health insurance -- the changes that affect them the most may be local. While legal challenges and partisan fights may dominate the national news, people who are concerned about their families' well-being shouldn't ignore what's happening at the state level.

State-by-state developments

California: The California Health Benefit Exchange was signed into law Sept. 30, 2010, making California the first state to enact a health insurance exchange. State-based health insurance exchanges are a provision of the law. By 2014, people who do not have coverage through their jobs will be able to use the exchanges to find insurance.

The California exchange won't open until January 2014, but early legislative action might provide for ample preparation and a smooth transition. In a news release, Gov. Arnold Schwarzenegger praised the "choice and competition" that the exchanges will bring to the market.

Maine: The state is teaming up with the federal Centers for Medicare & Medicaid Services' new federal Innovation Center, insurance companies, large employers and 26 medical practices in a program called the Multi-Payer Advanced Primary Care Practice Demonstration.

This experiment will test whether long-term health care costs are lowered with better coordination and a payment system that rewards preventive care and results. According to the Centers for Medicare a& Medicaid Services, other states participating in this pilot program are Vermont, Rhode Island, New York, Pennsylvania, North Carolina, Michigan and Minnesota.

Rhode Island: This state discovered that health insurance policies were being written at a reading level two years beyond that of a college graduate, as measured by the Flesch-Kincaid readability formula. According to new readability regulations issued by the state's Health Insurance Commissioner, as of August 31, 2010, no health insurance policy can be approved unless it meets certain readability standards. These standards include text that does not exceed an eighth-grade reading level, print that is no smaller than 12-point type, and a table of contents or index for policies that are more than 3,000 words or more than three pages long.

Virginia: The federal reform law's most controversial aspect -- the individual mandate requiring most Americans to have health insurance by 2014 -- is front and center in Virginia. In December, the state's attorney general, Ken Cuccinelli, won a ruling from a federal district judge declaring the individual mandate unconstitutional.

Just as interesting, however, is that the rest of the state's government is pushing ahead with health reform. According to Kaiser Health News, just one day after the ruling came down, an advisory panel for the chairman of the Virginia Health Reform Initiative published an 85-page report recommending the state move quickly to create a health insurance marketplace and to meet the law's other requirements. On the same day, Republican Gov. Robert McDonnell declared that "health reform is worth doing."

The fate and future of reform

Beginning in 2017, states can ask for exemptions from certain requirements of the federal health care reform law or opt out of the program entirely -- if they come up with an alternate system that's at least as affordable and comprehensive. This determination is to be made by the secretaries of departments of Health and Human Services and Treasury.