A low premium with a high deductible is not automatically the cheaper plan. Enter both plans and your expected year of care to see the total cost — premiums plus what you actually pay at the counter — and the spending level where the answer flips.
These three households all face the same two plans: a $780/month PPO with a $1,500 deductible, or a $700/month HDHP with a $3,300 deductible that lets them put $4,150 into an HSA. The only thing that changes is how much care they use.
PPO cash cost is $9,500 ($9,360 premiums + $140 in copays). HDHP cash cost is $9,000. The HDHP wins by roughly $500 before the HSA even enters the picture — and the $4,150 contribution shelters a further $1,230 from federal income tax and FICA.
This is the crossover zone. The PPO's copay structure keeps its out-of-pocket at $1,940, while the HDHP has to clear the full $3,300 deductible first. HDHP cash cost climbs to $11,760 against the PPO's $11,300. The PPO is now the cheaper plan on a pure cash basis.
Both plans hit their out-of-pocket maximums, so the decision collapses to premiums plus the OOP cap. PPO: $15,360. HDHP: $15,000. The HDHP's cap is only $600 higher but its premiums are $960 lower, so it wins again — this is why "high deductible plans are bad if you get sick" is only half true.
Run your own numbers in the calculator tab; the example buttons load each scenario.
Total annual cost has exactly two pieces: premiums you cannot avoid, and cost sharing you can.
For a copay-style plan (the PPO side):
For the HDHP side every billed dollar counts toward the deductible first, then coinsurance applies to the remainder, and the total is clipped at the out-of-pocket maximum:
Three forces pull in different directions, and they peak at different spending levels:
That is why a high-deductible plan can win in a healthy year, lose in the middle, and win again after a catastrophic event. Any comparison that only looks at the deductible is looking at one of the three forces.
An HSA-eligible plan lets you contribute pre-tax dollars and pay medical bills from the account.
The tax saving shown is contribution × (marginal federal rate + 7.65% FICA). That
money is not lost — it stays in the account and rolls over indefinitely — so treat the tax saving,
not the whole contribution, as the fair comparison against a non-HSA plan.
The single most useful thing you can know about two health plans is the spending level at which the cheaper plan stops being cheaper. The table below holds the plans fixed and varies only how much care the household uses.
| Spending year | PPO cash cost | HDHP cash cost | HDHP net of HSA tax shield | Cheaper (cash basis) |
|---|---|---|---|---|
| Very healthy — $0 other care | $9,500 | $9,000 | $7,770 | HDHP |
| Typical — $1,500 other care | $11,000 | $10,500 | $9,270 | HDHP |
| Moderate — $3,000 other care | $11,300 | $11,760 | $10,530 | PPO |
| High — $8,000 other care | $12,300 | $12,760 | $11,530 | PPO |
| Major event — $30,000 other care | $15,360 | $15,000 | $13,770 | HDHP |
Both plans use the same assumptions the calculator starts with: PPO $780/mo premium, $1,500 deductible, $35 office-visit copay with 4 office visits a year, 20% coinsurance, $6,000 out-of-pocket max. HDHP $700/mo premium, $3,300 deductible, 20% coinsurance, $6,600 out-of-pocket max, and a full $4,150 HSA family contribution at a 22% federal rate plus 7.65% FICA (a $1,230 tax saving). Cash cost excludes the HSA balance itself, which you keep. Every figure above is produced by the calculator on this page.
Notice the shaded row. Between roughly $1,500 and $10,000 of billed care the PPO is the lower-cash-cost plan, because its deductible is $1,800 lower and its copays blunt the early spending. Outside that band the HDHP's $960 annual premium advantage dominates. If you expect a normal year, the answer depends entirely on which side of that band you land on.
Two plans can both advertise a $1,500 deductible and cost wildly different amounts, because the deductible is only the threshold at which insurance starts sharing. Three other numbers matter at least as much:
Run all three through the calculator rather than comparing headline deductibles. The plan with the higher deductible is frequently the one with the lower total cost.
⚠️ Important: This calculator models a simplified two-plan comparison and does not account for networks, drug formularies, out-of-network deductibles, or employer HSA contributions. It is an estimating tool, not insurance advice — read the summary plan description for the exact terms of any plan before enrolling.