By James Pilcher
The Cincinnati Enquirer and Enquirer wire services

Only a few provisions of the Medicare bill signed Monday by President Bush will have immediate impact on the health-care options of citizens of Greater Cincinnati.

One of them, allowing creation of tax-free "health savings accounts," will mostly affect people who are too young for Medicare.

HSAs would let individuals up to age 65 with high insurance deductibles save, invest and then spend money for health care tax-free. Unlike flexible spending accounts many employers offer, unused money in HSAs would not be forfeited at the end of the year but would be reinvested.

U.S. Rep. Rob Portman, R-Terrace Park, said the accounts "have the potential of revolutionizing health care, and may be the most important part of this bill.

"This helps push market-based health care decisions ... and we need to get these market-based solutions into the system," he said.

Critics contend the accounts won't cut costs, but will establish a tax shelter for the wealthy - and set a precedent for future accounts to let affluent families evade taxes. They also argue the HSAs will increase health costs for many people by drawing young, healthy and affluent people out of the general pool of health insurance into the high-deductible insurance plans.

Sen. John Breaux of Louisiana, one of only two Democrats involved in Medicare negotiations (a process that included Portman), said the accounts do little to help the retirees that the new drug coverage aims to benefit.

The HSAs would be available to individuals with high-deductible health insurance. The deductible must be at least $1,000 for an individual or $2,000 for a family.

Individuals, their employers or family members could put away the amount of the annual deductible, up to $2,600 a year for individuals and $5,150 a year for families. People age 55 to 65 could make additional contributions to build a medical nest egg, with other family members or even employers able to contribute to the account.

Money deposited in the accounts could be invested, then withdrawn free of taxes for insurance premiums, prescription drugs, long-term care services, Medicare premiums and other health costs. The accounts can be set up at banks, insurance companies or other providers approved by the IRS, such as a brokerage firm.

"They're a good idea in concept, but I would have to say not many people would probably use them," said Scott Hettesheimer, owner of Westwood-based Hettesheimer Insurance Agency Inc., which provides flexible spending accounts and health reimbursement arrangements to its corporate clients.

"People already are not putting enough aside to cover themselves if they lose their livelihood, and most people don't have the discretionary income to spend on this," he said.