The federal government on Friday rejected Indiana's proposal to use its Healthy Indiana insurance plan in place of a Medicaid expansion beginning in 2014. The Centers for Medicare and Medicaid Services said in a letter that the state's request was premature because rules related to the expansion have not yet been finalized and encouraged Indiana to apply again in the future. "It's 2011, and we don't have those rules in place for 2014," said Cindy Mann, a deputy with the agency. "We are knee deep in the process." Neal Moore, spokesman for the Indiana Family and Social Services Administration, said he considered the letter to be a non-decision. "We are very disappointed," he said. "We need some clear direction about what's going to be happening here, and we need time to know whether we need to expand or dismantle (the Healthy Indiana Plan)." Lawmakers created the Healthy Indiana Plan at Gov. Mitch Daniels' urging in 2007. It requires those enrolled to receive certain preventive care and pay a small amount into a health savings account, along with a state contribution. About 42,000 Hoosiers are in the program, including about 14,000 childless adults.