Indiana Governor Mitch Daniels recently unveiled a fancy, new website to administer his “Healthy Indiana Plan,” (HIP) which was approved by federal officials late last month.

Like many state health reform plans, HIP has some good, bad, and ugly components. Among the bad and ugly provisions: Medicaid expansion for pregnant women and children up to 200% of the federal poverty level (FPL); SCHIP expansion up to 300% FPL; a “slacker mandate” allowing “children” up to the age of 24 to remain on their parents’ health insurance policies; and a 44.5-cent, per-pack tobacco tax to fund expansion of government-subsidized care for all individuals up to 200% FPL.

We’ll have to wait and see whether or not the “good”-sounding provisions turn out to be good at all. For the uninsured up to 200% FPL, HIP will establish an HSA-like ”Power Account” that will be seeded with $500 in state funds and a mandatory contribution from the “Power Account” owner. The money can be used to buy a standard benefits package from a pool of competing insurers. If the funds are exhausted, the individual can qualify for up to $1 million in insurance benefits; leftover money can be rolled over from year-to-year, or withdrawn for any purpose.

Some conservatives love the idea of “Power Accounts” – I’d suspect because, finally, a Republican governor dared to introduce an HSA-like mechanism for covering the uninsured. I’m not that optimistic. Besides the obvious crowd-out issues . . . Isn’t the tobacco tax a regressive and unstable funding source? Doesn’t “standardized benefits” mean a costly, one-size-fits-all package for everyone? And finally, are government-funded and government-administered “Power Accounts” really like HSAs, or will they become entitlements in which the government contributes more and more and individuals contribute less and less?

My fingers are crossed that we’ll see some positive answers to these questions as HIP begins implementation. In the meantime, however, free-market types should remain skeptical of seemingly-expansionist health reform plans wrapped in free-market rhetoric.