State health insurance laws may need to be revisited should the federal health reform measure stand up to legal questions brought before the judicial system. While the administration insists the new health insurance laws won't add to coverage costs, there is considerable doubt about what medical bills will look like if they proceed as written. All 50 states generally ride herd on all aspects of health insurance within their borders. Much of the disputes related to "Obamacare" were aired by state officials responding to the prospect of having to restructure their existing systems.

One part of the new federal law tightens the rules regarding Medicaid and SCHIP programs. The administration and Congress have instituted a number of efforts aimed at clamping down on the flexible applications of those programs. States will also find they have less control over their own management and stabilization procedures for Medicaid and other state health insurance plans.

A growing number of states have taken a hard look at "Section 125 cafeteria plans," a 1978 federal effort that changed the Internal Revenue Code. Cafeteria plans are benefits offered by employers. The key is that an employee can put part of his gross income into a specific account before taxes are figured. Cafeteria plan accounts cover insurance premiums and medical bills your existing plan doesn't cover. These accounts also lower gross incomes, which is reflected in lower taxes paid to the IRS and state tax collectors. Estimates indicate you will save up to 40 percent in taxes for the money contributed to a cafeteria plan.

Some states have instituted Children's Health Insurance Programs (CHIP) to provide financial aid to children of low-income state workers. Such programs were not allowed before the new federal laws were enacted. CHIP has been hotly debated because it persuaded states and individuals to use taxpayer money to replace private insurance. The new federal laws make it possible for state employees who maybe couldn't afford the cost of family coverage to qualify for the program. CHIP is paid for by the states and federal governments. Their contributions cover children of families whose income exceeds Medicaid limits but aren't able to pay for private insurance.

The administration's health reform has opened the way for states to work on developing the concept of "health homes." State officials are encouraged to apply to the Centers for Medicare and Medicaid Services for aid in improving health care coverage for high-cost Medicaid beneficiaries. The health homes would serve patients afflicted with substance abuse or mental health problems, along with a chronic health issue like obesity or diabetes. It's up to the states to develop their own concepts regarding health homes.