If I were to take your money from you, and say that you can only have it back when you do things the way I want you to - all while calling it an "incentive" - I suppose you'd consider that an imposition onto your life.
The federal government is doing the same thing to the states. It has no money that it can legitimately call its own personal property. All the money it has it has taken by force. So it's speaking in highly dishonest language to call it a mere "incentive" when it says to those whom it's taken money from that they can only have it back when they've made certain changes to their behavior. It is absolutely no different from directly requiring such changes through the force of law.
Hey, I got an idea. Let folks sign a contract that they can drive without seat belts, provided that they are then dumped into a life and medical insurance pool of those that just say no, and have to pay the higher premiums. And no insurance (heck you have to have insurance to drive in many states as it is, but you probably don't like that either), then no free pass. No free lunch. No pay, then no way.