HSA vs PPO Cost Comparison

Introduction

Choosing between a High Deductible Health Plan (HDHP) paired with an HSA and a traditional PPO plan involves more than comparing premiums. You must factor in deductibles, out-of-pocket maximums, employer contributions, expected medical expenses, and tax advantages. This HSA vs PPO Cost Comparison Calculator crunches all those numbers—premium, deductible, OOP max, employer HSA funding, medical costs, and your tax bracket—to show you true net cost side by side.

How to Use

1. Enter your HDHP annual premium, deductible, and OOP max.
2. Add any employer HSA contribution you receive.
3. Enter your PPO annual premium, deductible, and OOP max.
4. Estimate your annual medical expenses for the year.
5. Provide your marginal tax rate to calculate tax savings on HSA contributions.
6. Click Compare Costs to see a detailed breakdown of net annual spending for each plan.

Calculation Methodology

HDHP/HSA Net Cost = PremiumHDHP + max(0, Min(Expenses, OOPHDHP) − HSAContribution) × (1 − TaxRate)

PPO Net Cost = PremiumPPO + max(0, Min(Expenses, OOPPPO))

We assume medical expenses above your deductible go toward OOP max. HSA contributions reduce your taxable medical spend at your marginal rate.

FAQs

1. How do HSA tax benefits work?

Contributions reduce taxable income. Withdrawals for qualified expenses are tax-free. See IRS Publication 969.

2. Can I roll over unused HSA funds?

Yes, any unused balance remains in your account year to year and can grow tax-free.

3. What counts as qualified medical expenses?

Expenses defined in IRS guidelines—doctor visits, prescriptions, dental, vision, etc. Check HSAcenter.

4. Does PPO cover everything?

PPOs typically have higher premiums but lower deductibles and co-pays. OOP max caps your spending.

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6. Disclaimer

This calculator provides estimates. Actual plan costs depend on specific policy terms, network usage, and IRS changes. Consult a benefits advisor for tailored guidance.