HDHP vs PPO Health Plan Cost Calculator
Example: Expected medical spending this year: 8000 $ · Coinsurance after deductible: 20 % · Your marginal tax rate: 22 % · Employer HSA contribution (HDHP): 750 $ · HDHP monthly premium: 180 $ · HDHP deductible: 3000 $ · HDHP out-of-pocket max: 6000 $ · PPO monthly premium: 380 $ · PPO deductible: 1000 $ · PPO out-of-pocket max: 5000 $
| HDHP saves you (vs PPO) | $2,430 |
| HDHP total annual cost | $4,530 |
| PPO total annual cost | $6,960 |
Worked example
Say you expect $8,000 of medical spending. On the HDHP, premiums run $2,160 a year and your out-of-pocket comes to $4,000 (the $3,000 deductible plus 20% of the next $5,000), but a $750 employer HSA contribution and roughly $880 in tax savings on those HSA dollars bring the all-in cost to about $4,530. The PPO charges $4,560 in premiums plus $2,400 out of pocket for about $6,960. The high-deductible plan wins by roughly $2,430 — the opposite of what the premium alone suggested.
Frequently asked questions
Is a high-deductible plan always cheaper?
No. HDHPs win when your spending is either low (you mostly pay the low premium) or high (both plans hit their out-of-pocket max, and the HDHP usually has a lower total). PPOs can win in the middle band of moderate, predictable spending. That is exactly why you run your own expected number rather than guessing.
Why does the HDHP get a tax credit in this math?
A high-deductible plan is the only kind that lets you fund a Health Savings Account. Money you put in is pre-tax, so paying your out-of-pocket costs through the HSA effectively discounts them by your marginal tax rate. This tool credits that saving plus any dollars your employer drops into the HSA for free.
What should I use for expected medical spending?
Add up a realistic year: routine visits, prescriptions, planned procedures, and a buffer for the unexpected. If you are unsure, run the tool twice — once for a healthy year and once for a heavy year — to see how the answer flips.
What is coinsurance versus a copay?
After you meet the deductible, coinsurance is the percentage of each bill you keep paying (commonly 20%) until you reach the out-of-pocket maximum. Copays are flat per-visit fees. This calculator models the deductible-then-coinsurance structure most plans use.
Does the HSA money disappear if I do not use it?
No. Unlike an FSA, HSA balances roll over every year and stay yours for life, and you can invest them. That is why an HDHP paired with an HSA can be a long-term wealth tool, not just a way to cover this year's bills.