Experts may continue to debate the merits of medical savings accounts, but there is one thing everyone can agree on: They’re not catching on very fast.

As part of the Health Insurance Portability and Accountability Act of 1996, Congress passed a 4-year demonstration program allowing up to 750,000 Americans working in small businesses to purchase medical savings accounts, or MSAs. So far, only 54,000 have done so, according to the Internal Revenue Service.

Observers offer several reasons for MSAs’ slow start. One possibility is that MSAs are too different from other high-deductible insurance products that are now on the market, said Tom Wildsmith, an actuary at the Health Insurance Association of America in Washington.

For example, individual policies typically have a $1,000/person deductible; if more than one person in a family gets sick in a year, the total deductible will be capped at $2,000 or $3,000. But with an MSA, the family faces a $3,000 deductible even if only one person gets sick, Mr. Wildsmith said.

In general, MSAs allow patients to put several thousand dollars into a tax-free account to be used solely for medical expenses. MSAs are typically paired with high-deductible insurance policies that kick in after the MSA dollars–and any remaining out-of-pocket costs–are exhausted. If any money is left over in the MSA account, patients can use it for other expenses–although they will pay a penalty for withdrawals if they are under 65.

Another problem with MSAs is that they are tax driven, which is common in life insurance policies but not health insurance policies, Mr. Wildsmith noted. “Most health insurance agents aren’t accustomed to talking to their clients about tax planning.”

Robert Laszewski, a Washington health care consultant, said that he thinks patients are turned off by MSAs’ complexity. “They have to keep track of things like whether they should make a claim to the MSA or to the catastrophic insurance policy,” he said.

And the policies aren’t very popular with insurance agents, for good reason, Mr. Laszewski continued. Unlike individual health insurance policies, MSAs are divided into two parts–the savings account and the catastrophic insurance policy–and only the catastrophic policy funds are counted toward the agents’ commissions.

“What did you just do to their commission? You’ve cut it in half,” he said.

Kelly Loussedes, a spokeswoman for the Council for Affordable Health Insurance, an insurer group that supports MSAs, said she blames the slow start-up partly on the way the demonstration project was set up.

“Only three groups of people can have an MSA: [employees of] companies with 50 or fewer employees, those who are self-employed, and those who were reviously uninsured,” Ms. Loussedes explained.

“Once MSAs are opened up [to the whole population], they’ll really expand,” she predicted.

Ron Pollack, executive director of Families USA, a Washington-based consumer group, said that, although he opposes MSAs, he’s surprised they aren’t selling faster. “I would have thought that healthy and wealthy people would find them beneficial.”

In fact, Mr. Pollack and other MSA opponents argue that healthy patients are the only ones who sign up for the accounts, leaving the sicker patients in fully insured plans and causing premiums in those plans to increase.

But Ms. Loussedes noted that more than one-third of those signing up for MSAs were previously uninsured. This lends credence to the notion that the accounts were not being used just by wealthy patients.

“The experience speaks for itself,” she commented.

Most physician organizations, with the exception of the American Academy of Pediatrics, continue to support MSAs. They say that the accounts make consumers more cost conscious and force physicians to become more price competitive.

“We need multiple insurance products to be available in multiple markets,” commented Dr. William Mahood, a trustee of the American Medical Association. “MSAs won’t be attractive to everyone, but we’re not a one-size-fits-all society.”

Bob Doherty, head of the Washington office of the American College of Physicians–American Society of Internal Medicine, said that his organization is taking a cautious approach to MSAs.

“They’re not likely to be a panacea [for the uninsured], but they also aren’t a bomb that will blow up the health insurance system,” Mr. Doherty said. “There needs to be a careful evaluation of what impact they will have.”

And Republican members of Congress appear to be satisfied enough with the results of the MSA experiment that they have put a measure opening up MSAs to all comers into the Patients’ Bill of Rights legislation now being debated on Capitol Hill. President Bill Clinton has indicated, however, that he probably will veto any Patients’ Bill of Rights that includes an MSA expansion provision.

But Mr. Laszewski said that Democrats fears of MSAs wrecking the insurance market are groundless, given how unpopular they have proved to be.