Compare the real yearly cost of an HSA-eligible high-deductible plan (HDHP) versus a PPO, including premiums, your expected medical spending, and the HSA tax saving that often tips the decision.
Sample input: HDHP monthly premium ($): 300, HDHP deductible ($): 3000, PPO monthly premium ($): 500, PPO deductible ($): 1000, Expected medical spending this year ($): 2000, Your marginal tax rate (%): 30, Planned HSA contribution ($): 4400
HDHP savings vs PPO: 2720 (HDHP + HSA is cheaper)
For your expected $2,000 of medical spending, the HDHP saves you about $2,720 per year versus the PPO (HDHP $4,280 vs PPO $7,000). The $1,320 HSA tax saving is often what tips the balance toward the HDHP.
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It adds each plan annual premium to the out-of-pocket cost (your expected spending, capped at the deductible) and subtracts the HSA tax saving the HDHP unlocks. The difference is your estimated annual savings; positive means the HDHP plus HSA is cheaper.
Only an HDHP lets you contribute to an HSA. Contributing pre-tax lowers your taxable income by the contribution times your marginal rate, which often more than offsets the HDHP higher deductible and tips the total cost in the HDHP favor (IRS Publication 969).
A PPO often wins if you have high, predictable medical spending, because its lower deductible caps your out-of-pocket sooner. This tool uses deductibles as a planning proxy; real plans also have coinsurance and out-of-pocket maximums worth checking.
The plan must meet the IRS high-deductible health plan rules — for 2026 a minimum deductible of about $1,700 self-only or $3,400 family — and you must not have disqualifying other coverage. Confirm HSA eligibility on the plan summary before enrolling.