Yes they did turn down the federal government's bait and switch Medicaid expansion. They understood the financial risk their state would be taking by accepting it. The new bill would put the state in charge of how to distribute the Medicaid assistance as compared to the central governments requirements.
The Heritage foundations plan would have had little to no effect on the existing health insurance plans as compared to what Obamacare complete shake up and chaos it created. The word "mandate" is about tho only thing that Heritagecare and Obamacare have in common. it is "what" was mandated that make any comparison argument invalid.