HDHP vs PPO Out-of-Pocket Crossover

Stack premiums, deductibles, coinsurance, and HSA funding to quantify the true annual cost of a high-deductible health plan versus a PPO and see when, if ever, the PPO becomes cheaper once HSA dollars and tax savings are factored in.

Total employee-paid premium for the high-deductible plan.
Total employee-paid premium for the preferred provider organization plan.
Projected allowed claims for the household before plan cost-sharing.
Funds deposited by the employer into the HSA for HDHP participants.
Defaults to $3,000. Enter the family deductible for the HDHP.
Defaults to $6,500. Enter the statutory out-of-pocket maximum for the HDHP tier.
Defaults to 20%. Percentage of post-deductible claims paid by the member until the out-of-pocket max is hit.
Defaults to $1,000. Enter the family deductible for the PPO.
Defaults to $4,000. Enter the PPO out-of-pocket maximum for in-network care.
Defaults to 15%. Percentage of post-deductible claims paid by the member until the out-of-pocket max is met.
Defaults to $0. Enter your planned pre-tax payroll HSA contribution to capture tax savings.
Defaults to 24%. Used to value HSA tax savings on employee contributions.

Benefits modeling estimate only. Confirm actual plan documents and IRS contribution limits before electing coverage.

Examples

  • HDHP premium $4,200, PPO premium $6,600, $8,000 claims, $1,000 employer HSA, defaults for cost-sharing ⇒ HDHP net annual cost $7,200.00 USD • PPO net annual cost $8,650.00 USD • Difference: $1,450.00 USD cheaper with the HDHP • Expected out-of-pocket gap (claims) −$1,950.00 USD • HSA dollars offsetting HDHP spend $1,000.00 USD • PPO never becomes cheaper within typical claim ranges.
  • HDHP premium $3,600, PPO premium $5,400, $18,000 claims, $1,500 employer HSA, HDHP coinsurance 10%, PPO coinsurance 20%, employee contributes $2,400 with 32% marginal tax ⇒ HDHP net annual cost $5,652.00 USD • PPO net annual cost $9,720.00 USD • Difference: $4,068.00 USD cheaper with the HDHP • Expected out-of-pocket gap (claims) $0.00 USD • HSA dollars offsetting HDHP spend $2,268.00 USD • PPO never becomes cheaper within typical claim ranges.

FAQ

How should I handle prescription copay tiers?

Add typical pharmacy spend into the expected annual medical spend so the calculator reflects combined medical and drug usage.

What if the employer seed varies by coverage level?

Enter the appropriate HSA contribution for the selected tier (employee, couple, family) to capture the available offset.

Can I include FSA contributions for the PPO?

Yes. Subtract the expected tax savings from the PPO result manually or rerun the calculator with an adjusted PPO premium that reflects employer contributions.

How do I test catastrophic years?

Increase the expected claims input to the out-of-pocket maximum for each plan to confirm which option minimizes total exposure in a worst-case year.

Additional Information

  • Claims paid before the deductible hit are borne entirely by the member until the deductible amount is reached.
  • After meeting the deductible, each plan's coinsurance applies until the out-of-pocket maximum caps further spending.
  • Employer HSA contributions plus employee pre-tax contributions generate an HSA offset that reduces the HDHP's effective cost.
  • The breakeven scan tests whether a PPO ever becomes cheaper once premiums, claims cost-sharing, and HSA dollars are combined.
  • A negative out-of-pocket gap means the PPO pays more of the medical claims even if the HDHP still wins overall because of lower premiums and HSA incentives.

Related calculators