HDHP vs PPO Calculator
Choose between High Deductible Health Plan (with HSA) and PPO based on expected medical use, premium difference, and tax savings.
HDHP vs PPO Annual Cost
Total annual cost = premiums + expected medical (capped at max out-of-pocket). HDHP also reflects HSA tax savings.
How is this calculated?
Formula: Premium cost = 12 × monthly premium. Out-of-pocket = min(expected spend, max-out-of-pocket). HDHP HSA tax savings = contribution × marginal rate. HDHP net = premiums + out-of-pocket - HSA savings. Source: IRS Publication 969 and CMS plan design rules.
About HDHP vs PPO
An HDHP vs PPO calculator weighs two US employer health plans against each other on total annual cost. The HDHP trades a higher deductible for a lower premium and unlocks an HSA, the only triple-tax-advantaged account in the US tax code. The PPO carries a higher premium but covers care sooner.
How it works
The model computes the total dollar cost of each plan under your expected medical spend, then subtracts the HSA tax benefit on the HDHP side. The plan with the lower net cost wins.
PPO Net Cost = 12 x PPO Premium + min(Expected Spend, PPO MOOP) HDHP Net Cost = 12 x HDHP Premium + min(Expected Spend, HDHP MOOP) - (HSA Contribution x Marginal Tax Rate) Breakeven Spend = where the two costs intersect (varies by plan, usually 3 to 8k USD per year)
- HDHP qualifying limits for 2026: minimum deductible $1,650 self / $3,300 family; MOOP cap $8,300 self / $16,600 family (IRS Rev. Proc. 2024-25).
- 2026 HSA contribution limits: $4,300 self / $8,550 family; $1,000 catch-up at age 55+.
- ACA-wide MOOP cap for 2026: $9,200 self / $18,400 family across all qualified plans.
- Marginal rate: combined federal + state + FICA (7.65 percent) because HSA payroll contributions escape FICA, unlike traditional 401(k).
Worked example
A 34 year old in the 24 percent federal bracket (plus 5 percent state + 7.65 percent FICA = 36.65 percent effective) compares plans at open enrollment. Expected medical spend $2,500. Self-only coverage.
- PPO premium: $450 per month x 12 = $5,400 per year.
- PPO MOOP: $4,500. Expected spend $2,500 is below MOOP, so out-of-pocket = $2,500.
- PPO net cost: $5,400 + $2,500 = $7,900.
- HDHP premium: $200 per month x 12 = $2,400 per year.
- HDHP MOOP: $7,000. Out-of-pocket = $2,500.
- HSA contribution: $4,300 (2026 self-only limit). Tax savings = $4,300 x 36.65 percent = $1,576.
- HDHP net cost: $2,400 + $2,500 - $1,576 = $3,324.
- HDHP wins by: $7,900 - $3,324 = $4,576 per year.
IRS 2026 limits at a glance
| Limit | Self only | Family |
|---|---|---|
| HDHP minimum deductible | $1,650 | $3,300 |
| HDHP maximum out-of-pocket | $8,300 | $16,600 |
| ACA MOOP cap (all plans) | $9,200 | $18,400 |
| HSA contribution | $4,300 | $8,550 |
| HSA catch-up (age 55+) | $1,000 | $1,000 |
| FSA contribution (separate) | $3,400 | $3,400 |
Common mistakes
- Counting only the premium gap. Skipping the HSA tax savings hides 25 to 40 percent of the HDHP advantage. The triple tax shield is the whole point.
- Ignoring employer HSA seed money. Many employers contribute $500 to $1,500 into HDHP enrollees' HSAs. That is real cash on the table you forfeit by enrolling in PPO.
- Choosing PPO for one expected pregnancy or surgery. Even an $8,000 medical year often nets cheaper on HDHP because you hit the MOOP either way and pocket $1,000+ HSA tax savings on top.
- Funding the HSA only to the deductible. Max it every year and treat it like a stealth Roth IRA. After age 65, qualified medical withdrawals stay tax-free, and non-medical withdrawals are taxed like a traditional IRA with no penalty.
- Confusing HDHP with bad coverage. HDHPs cover preventive care (vaccines, annual physical, basic screenings) at $0 before the deductible. The network and benefits are typically identical to the matching PPO.
- Forgetting Medicare disqualifies HSA contributions. Once you enroll in any part of Medicare (including Part A at 65 if you delayed Social Security), HSA contributions must stop, but the existing balance keeps growing.
Related tools and glossary
Frequently asked questions
When does HDHP beat PPO?
Almost always for healthy adults with low expected medical utilization. The premium savings plus HSA tax advantage usually beat any extra out-of-pocket cost. Switch to PPO only if you have predictable high medical spending (chronic illness, planned surgery, pregnancy) that will push you to the deductible quickly.
What qualifies as an HDHP in 2026?
Minimum deductible 1,650 USD self only / 3,300 USD family. Maximum out-of-pocket 8,300 USD self only / 16,600 USD family per IRS Rev. Proc. 2024-25. The plan must also have no benefits before the deductible except IRS-listed preventive care.
Can I contribute to both HSA and FSA?
Only if your FSA is a Limited Purpose FSA (dental and vision only). A general-purpose FSA disqualifies you from HSA contributions for the entire plan year. A Dependent Care FSA does NOT disqualify you because it is for childcare, not medical.
What is the HSA crossover point?
The crossover is where HDHP and PPO net costs meet. Below the HDHP deductible, HDHP almost always wins. Between the deductible and the HDHP max out-of-pocket, the two converge. Above the HDHP max out-of-pocket (often when you exceed the PPO deductible plus the premium gap), PPO can win if expected spend is very high.
Sources
- IRS Rev. Proc. 2024-25 (2024) Inflation Adjusted Amounts for HSAs and HDHPs in 2026.
- IRS Publication 969 (2025) Health Savings Accounts and Other Tax-Favored Health Plans.
- CMS (2025) Notice of Benefit and Payment Parameters for 2026, ACA maximum out-of-pocket limits.
- KFF (2025) Employer Health Benefits Survey, premium and deductible benchmarks.