HSA planvsPPO plan
HSA vs PPO Calculator
Enter both plans' premiums, deductibles, and cost-sharing, plus what you expect to spend on care this year. The verdict compares total annual cost including the HSA's tax savings and any employer contribution.
Your expected year
The HSA plan saves $2,280 this year
HSA tax savings: $480 on a $2,000 contribution at your 24% rate, plus $1,000 from your employer.
Low spend favors the HSA plan's lower premium and tax savings. High spend favors whichever plan's out-of-pocket max is lower -- drag to find where the verdict flips.
| HSA plan | PPO | |
|---|---|---|
| Annual premium | $3,600 | $6,000 |
| Out-of-pocket medical cost | $4,000 | $2,400 |
| HSA tax savings + employer credit | $1,480 | — |
| Total annual cost | $6,120 | $8,400 |
How this is calculated
Out-of-pocket cost under each plan follows standard deductible + coinsurance + out-of-pocket-max cost sharing: you pay the full bill up to the deductible, a coinsurance share of the amount above it, capped at the out-of-pocket maximum. HSA tax savings = your own contribution × your marginal tax rate; the employer's contribution is added as a direct credit, not a deduction, since it was never taxed as your income.
| Medical spend | HSA total cost | PPO total cost | Winner |
|---|---|---|---|
| $0 | $2,120 | $6,000 | HSA |
| $2,000 | $4,120 | $7,200 | HSA |
| $5,000 | $5,520 | $7,800 | HSA |
| $8,000 | $6,120 | $8,400 | HSA |
| $15,000 | $7,520 | $9,800 | HSA |
On these plan numbers the HSA plan wins at every spend level shown, because its premium and tax savings are large enough to absorb the higher deductible even at $15,000 of medical spend. That won't be true for every plan pair -- a PPO with a smaller premium gap can flip the high-spend rows.
Frequently Asked Questions
How does the HSA plan win even with a $3,000 deductible against the PPO's $1,000?
At $8,000 of expected spend, the HSA plan's lower premium ($300/mo vs $500/mo -- a $2,400/year gap) plus $480 in tax savings on your own contribution plus a $1,000 employer contribution outweigh the higher deductible's extra out-of-pocket cost. Total cost: $6,120 for the HSA plan versus $8,400 for the PPO.
What if I barely use any healthcare this year?
At $500 of medical spend instead of $8,000, the HSA plan's advantage grows to $3,880 -- the premium savings and tax benefit matter most when you're not hitting either deductible.
How is the HSA tax savings calculated?
Only your own contribution generates a deduction -- $2,000 at your 24% marginal rate is $480 in tax savings. The employer's $1,000 contribution isn't a deduction (it was never your taxable income), so it's counted as a straight credit against cost instead.
What happens to unused HSA money?
It stays yours, invested and growing tax-free, with no "use it or lose it" deadline -- unlike an FSA. That makes an HSA's contribution genuinely different from spending on premiums: money you don't spend on medical care this year is still yours in 20 years, for medical costs or, after 65, for any purpose (taxed as ordinary income if non-medical, like a traditional IRA). This calculator only prices the current year, so it understates the HSA's long-run advantage if you don't spend it all.
Can I even choose an HSA plan?
Only if it's IRS-qualified as a high-deductible health plan (HDHP) -- for 2025 that means a minimum deductible of $1,650 individual / $3,300 family and a maximum out-of-pocket of $8,300 / $16,600. Check your plan's actual documents; not every plan marketed as "HSA-eligible" qualifies.
What isn't captured here?
Network differences (HSA/HDHP plans and PPOs can have different provider networks entirely, not just different cost-sharing), prescription drug formularies, and the HSA's long-term investment value if left unspent. This calculator compares one year's cash cost only.
SidebySideCalc calculators apply standard, published formulas -- loan amortization, future-value-of-annuity, and deductible/coinsurance cost-sharing math -- to the numbers you enter. They are estimates for comparing two paths, not tax, legal, or financial advice: your lender, plan documents, and a tax professional decide the real figures for your situation.