A high-deductible health plan (HDHP) trades a lower premium for more exposure to medical costs before insurance covers a larger share. Which plan actually costs less in a given year depends entirely on how much care gets used — not on the premium alone.
How it works
For each plan, out-of-pocket medical cost is calculated from the deductible, coinsurance rate and out-of-pocket maximum, applied to expected annual spending. Adding the premium to that figure gives each plan’s true total annual cost, which is what actually gets compared.
The HSA angle this doesn’t cover
An HDHP is the only plan type that allows HSA contributions, which carry their own tax advantage — this site’s HSA calculator covers that separately, since it’s a benefit beyond the raw cost comparison here.
How to use this calculator
- Enter expected annual medical spending.
- Enter both plans’ premiums, deductibles, coinsurance rates, and out-of-pocket maximums.
Frequently asked questions
Why might the HDHP be cheaper even with a much higher deductible?
Because the premium savings can outweigh the extra deductible exposure, especially at lower expected spending levels — the crossover point depends on the specific numbers of each plan.
Does this factor in HSA tax savings?
No — this is a pure cost-of-care comparison; the HSA tax advantage would further favor the HDHP if contributions are actually being made.
What happens once expected spending exceeds the out-of-pocket max?
The plan pays 100% of covered costs beyond that point — this calculator caps each plan’s out-of-pocket figure there, so higher spending stops adding to the total.
