When Congress allowed a small pilot program to test Medical Savings Accounts in 1996, it placed so many restrictions on this innovative form of health care insurance that the popularity of the program was hobbled from the start, experts report.

According to the General Accounting Office and the National Center for Policy Analysis, here are some of the major hurdles:

• With the four-year demonstration project limiting the number of accounts nationwide to only 750,000, the overwhelming majority of insurance companies decided the market was too small and the legal future of the accounts too uncertain -- resulting in only 60 insurers offering them.

• Further limiting the potential market, Congress only allowed the self-employed and firms with fewer than 50 employees to take advantage of MSAs.

• Tax-free deposits are limited to 65 percent of the individual deductible for catastrophic health insurance, and 75 percent of the family deductible.

• Under federal rules, deductibles for catastrophic health insurance are set at between $1,500 and $2,250 for individuals and between $3,000 and $4,500 for families.

Moreover, because the legislation forbids employees and employers from sharing the cost of funding an MSA for routine health care, many small employers decided MSAs were too expensive. Some small employers complain that the federal rules for setting up MSAs are so complicated they would have to hire consultants, which would incur even more costs.