Premiums are the easy number and the wrong one. This compares a high-deductible plan (with an HSA) against a PPO on total annual cost at your expected level of medical spending — premiums, deductible, coinsurance, and the out-of-pocket cap all included.
Only the fields that differ between the two plans matter. Leave the HRA/HSA employer contribution at 0 if there is none.
Same two plans across five spending levels: HDHP $600/mo, $3,500 deductible, 20% coinsurance, $6,200 OOP max, $1,200 employer HSA seed vs PPO $800/mo, $1,500 deductible, 20% coinsurance, $6,000 OOP max. Premiums are 12× the monthly figure.
| Year type | Care spending | HDHP: premium + care | PPO: premium + care | Cheaper |
|---|---|---|---|---|
| Healthy year — preventive only | $400 | $7,200 | $10,000 | HDHP |
| One ER visit + labs | $4,200 | $9,640 | $11,640 | HDHP |
| Chronic condition, steady use | $12,000 | $11,200 | $13,200 | HDHP |
| Surgery + hospital stay | $45,000 | $12,200 | $15,600 | HDHP |
| Family of 4, two kids, average | $9,500 | $10,700 | $12,700 | HDHP |
Figures exclude HSA tax savings, which push every row further toward the HDHP. In the healthy and mid-spending rows the HDHP wins before the tax break is counted.
The gap between the two monthly premiums is money you keep whether or not you use care. A $200/month gap is $2,400 a year — larger than many people's actual out-of-pocket spending. That is why HDHPs win for healthy households even though the deductible looks alarming.
HSA contributions avoid federal income tax and the 7.65% FICA taxes (Social Security + Medicare) when made through payroll — a benefit an FSA also has but a 401(k) does not. Withdrawals for qualified medical costs are tax-free, and the account is portable: it is yours after you leave the job, unlike an FSA.
A PPO's lower deductible means the insurer starts paying sooner. If you expect a known procedure — a knee replacement, a birth, ongoing specialty care — model the actual allowed charges, not the billed charges. Two plans with the same 20% coinsurance can still differ substantially because of negotiated rates.
For 2026 the ACA caps self-only out-of-pocket exposure at $10,600 and family coverage at $21,200 for in-network essential benefits; HDHP-qualifying plans must stay at or below $8,500 self-only / $17,000 family. Above the OOP max, both plans cost the same in care — only the premium gap and tax break still differ.
Network breadth, prescription formularies, and the value of a plan that covers a specific specialist are not priceable. If your oncologist or therapist is out-of-network on the cheap plan, the cheap plan is not cheap.
The household that benefits most from an HDHP is not the one that never sees a doctor — it is the one that can fund the HSA to its limit and pay routine bills from cash flow. A family that maxes a family HSA at $8,750 in 2026 saves roughly $2,600 in combined income tax and FICA at the 22% bracket, which frequently exceeds the entire deductible difference between the two plans.
Conversely, if your expected spending is reliably above the PPO's out-of-pocket maximum — think ongoing biologics, dialysis, or a planned surgery — the deductible difference is irrelevant because both plans cap your exposure. At that point the comparison reduces to premium plus tax break, and the HDHP usually wins by a wide margin.
Employer premium contributions are not taxable income to you, and they are already excluded from the monthly premium figures you enter — enter the amount deducted from your paycheck, not the plan's total cost, if your employer covers the difference.
⚠️ Important: This comparison uses the numbers you enter and does not include network restrictions, drug formularies, or state-specific mandates. Actual allowed charges differ from billed charges, so replace your spending estimate with last year's Explanation of Benefits totals rather than a guess. Verify current-year HSA and HDHP limits with the IRS or your plan documents before enrolling.