HDHP vs PPO: Which Health Plan Actually Costs Less?
The plan with the cheapest premium is not automatically the cheapest plan. Enter both options from your open-enrollment packet, drag the slider to your expected medical usage, and see the true total cost of each — including your break-even point. Everything runs in your browser; nothing you enter is sent anywhere.
The defaults reflect typical 2026 employer-plan figures — replace them with the numbers from your own benefits summary.
Plan A — High-deductible (HDHP)
Plan B — Low-deductible (PPO)
The High-deductible plan saves you $1,670 per year at this spending level.
Plan A total: $4,490 · Plan B total: $6,160 (premiums + out-of-pocket − employer contribution)
| If you spend… | Plan A costs | Plan B costs | Cheaper plan |
|---|---|---|---|
| $500 | $1,550 | $5,060 | Plan A |
| $2,000 | $3,050 | $5,760 | Plan A |
| $5,000 | $4,690 | $6,360 | Plan A |
| $10,000 | $5,690 | $7,360 | Plan A |
| $30,000 | $8,050 | $9,060 | Plan A |
Model assumes in-network care and that coinsurance applies after the deductible until the out-of-pocket maximum. It ignores copay-based services and the tax savings of your own HSA contributions — both usually favor their respective plan types slightly. Educational estimate, not financial or benefits advice.
How to read your results
Your true yearly cost for a health plan is 12 months of premiums + what you pay for care − any employer HSA/HRA contribution. Care costs are capped by the out-of-pocket maximum, which is why high-deductible plans often win at both extremes: light usage (you keep the premium savings) and catastrophic usage (the cap limits the damage while premium savings continue). Low-deductible plans tend to win in the predictable middle — steady prescriptions, regular specialists, a planned procedure.
Three things the simple math understates: your own HSA contributions are tax-deductible (a real dollar advantage unique to HDHPs), copay plans make frequent routine visits cheaper than coinsurance math suggests, and family plans can have aggregate deductibles that work differently — check your summary of benefits.
Frequently asked questions
Is a high-deductible health plan worth it?
It depends almost entirely on how much care you use. HDHPs charge lower monthly premiums in exchange for a higher deductible, so they win when your medical spending is low — and often when it's very high, because out-of-pocket maximums cap your worst case while the premium savings continue all year. The middle zone, where you spend a few thousand dollars but don't hit the cap, is where low-deductible plans usually win. This calculator finds that break-even point for your actual numbers.
What is the break-even point between an HDHP and a PPO?
The break-even point is the level of annual medical spending where both plans cost you the same total (premiums plus out-of-pocket costs, minus any employer HSA contribution). Below it, one plan is cheaper; above it, the other is. For typical employer plans the break-even often lands between $2,000 and $8,000 of yearly medical spending, but it varies enough that you should run your own numbers.
Does the employer HSA contribution really matter?
Yes — it's often the deciding factor. An employer depositing $750–$1,500 into your HSA is direct compensation you only get by choosing the HDHP. It effectively shrinks the HDHP's deductible gap, and unspent HSA money rolls over forever and can be invested. Always include it when comparing plans.
When does a PPO or low-deductible plan make more sense?
When you reliably use a moderate amount of care every year: ongoing prescriptions, regular specialist visits, therapy, young children, a planned pregnancy or surgery. Predictable moderate spending is exactly the zone where paying higher premiums for a lower deductible comes out ahead — and copay-based coverage for frequent visits adds convenience the raw math doesn't capture.
Do premiums count toward the deductible or out-of-pocket maximum?
No. Premiums are a separate, unavoidable cost you pay regardless of whether you use any care. Only what you pay for actual medical services — deductibles, coinsurance, and copays — counts toward the out-of-pocket maximum. That's why comparing plans on premiums alone is misleading: total yearly cost is premiums plus expected out-of-pocket spending.
Keep reading
Our guide to health insurance deductibles explains coinsurance, embedded vs. aggregate family deductibles, and the open-enrollment mistakes that cost people the most. Deciding on life insurance too? Try our life insurance needs calculator.
Disclaimer: This calculator provides general educational estimates, not personalized financial, insurance, tax, or benefits advice. Plan rules vary — verify details against your official summary of benefits and coverage, and consult a licensed professional for decisions specific to your situation.
