HDHP vs PPO True Total Cost Calculator
Example: HDHP monthly premium (your share): 150 $ · HDHP annual deductible: 3000 $ · HDHP coinsurance after deductible: 20 % · HDHP out-of-pocket maximum: 6550 $ · PPO monthly premium (your share): 350 $ · PPO annual deductible: 1000 $ · PPO coinsurance after deductible: 20 % · PPO out-of-pocket maximum: 4000 $ · Employer HSA contribution (annual): 800 $ · Expected annual medical claims: 2000 $
| HDHP saves vs PPO (positive = HDHP wins) | $2,400 |
| HDHP true annual cost | $3,000 |
| PPO true annual cost | $5,400 |
| Claim level where PPO becomes cheaper | $500 |
Worked example
With $2,000 in expected claims: HDHP = $150/mo × 12 + $2,000 oop − $800 HSA employer seed = $2,800. PPO = $350/mo × 12 + $1,000 deductible + 20% of $1,000 = $5,400. HDHP saves $2,600 this year. The PPO only wins once claims exceed roughly $6,000, at which point the lower PPO out-of-pocket maximum caps your exposure sooner.
Frequently asked questions
What is an HSA and why does it matter here?
A Health Savings Account lets you contribute pre-tax dollars (2024 limit: $4,150 individual / $8,300 family) that grow tax-free and can be withdrawn tax-free for qualified medical expenses. The HSA triple-tax advantage tilts the math further toward HDHPs for healthy savers.
What counts as an expected annual claim?
Add up last year's medical bills before insurance paid: doctor visits, prescriptions, labs, therapy, imaging, urgent care. If you have a chronic condition requiring regular care, use a higher estimate. The Kaiser Family Foundation reports the average employer-plan enrollee incurs about $2,800 in claims per year.
Does the HDHP always win for healthy people?
Not always. The break-even claim level varies by your specific premiums and deductibles. Some PPO plans have low enough premiums that they compete even at low utilization. Run the numbers with your actual plan values every open enrollment season.
Can I use an FSA with an HDHP?
A standard Flexible Spending Account (FSA) disqualifies you from contributing to an HSA. You may pair an HDHP with a limited-purpose FSA (restricted to dental and vision) while preserving HSA eligibility.