Good Medicine Medical savings accounts offer tax advantages and more--but you'd better rush to get them.

The health insurance market for entrepreneurs will take on ahurly-burly Wild West look come January 1, 1997, when The HealthInsurance Portability and Accountability Act takes effect.That's when insurance companies, as well as banks and financialservices firms--and who knows who else--will start offering medicalsavings accounts (MSAs) on a nationwide scale.

MSAs allow individuals with high-deductible health insuranceplans to set aside money for out-of-pocket medical expenses andgain advantages on federal taxes. They have existed on the statelevel for some time: Eighteen states already allow a deduction onstate income taxes for MSAs, according to Jack Strayer, director offederal affairs for The Council for Affordable Health Insurance, atrade association.

The health insurance reform bill signed by President Clintonthis summer--dubbed Kassebaum-Kennedy for its two Senatesponsors--authorized federal income tax deductions for MSAs for thefirst time under a four-year pilot program. These MSAs will berestricted to sole proprietors and companies with fewer than 50employees.