Health Insurance Deductible Optimizer
At $3,000 of medical bills
HDHP with HSA costs $1,310 less
| PPO (low deductible) | HDHP with HSA | |
|---|---|---|
| Premiums | $2,640 | $1,080 |
| Out of pocket | $1,400 | $3,000 |
| Employer HSA money | $0 | −$750 |
| Tax saved on your HSA | $0 | −$600 |
| Net yearly cost | $4,040 | $2,730 |
Worst case (a year at the out-of-pocket maximum): PPO (low deductible) $7,140, HDHP with HSA $6,730. HDHP with HSA is cheaper at every level of spending.
Net cost by how much care you use
Medical bills across, yearly cost up. Copays, out-of-network care and drug tiers are not modelled; check each plan's summary of benefits. Unspent HSA money stays yours and can be invested, which this one-year view does not count.
Compare two health plans, such as a low-deductible PPO and an HSA-eligible high-deductible plan, by their total yearly cost at your expected medical spending: premiums plus deductible and coinsurance up to the out-of-pocket maximum, minus employer HSA money and the tax saved on your own HSA contributions.
Formula
Worked Example
The PPO costs $2,640 in premiums plus $1,400 out of pocket. The HDHP costs $1,080 in premiums and the whole $3,000 of bills, but the employer's $750 and $600 of tax saved on your $2,000 HSA contribution bring it to $2,730. Here the HDHP is cheaper even in a worst-case year.
Frequently Asked Questions
What makes a plan HSA-eligible in 2026?
It must be a high-deductible health plan with a deductible of at least $1,700 for self-only or $3,400 for family coverage and an out-of-pocket maximum of no more than $8,500 or $17,000. You can then contribute up to $4,400 (self-only) or $8,750 (family) to an HSA, including employer money, plus $1,000 more from age 55.
Why is an HSA worth so much?
Contributions are tax-deductible (and free of payroll tax through an employer), growth is tax-free, and withdrawals for medical costs are tax-free. Unspent money carries over and can be invested, so it works like an extra retirement account.
When is a low-deductible plan better?
When you expect high, predictable medical costs every year and the low-deductible plan's out-of-pocket maximum plus premiums is lower, or when you couldn't cover a large deductible from savings. Compare both plans at your likely spending and at their worst case.