A lower premium with a higher deductible only actually saves money if claims stay below the point where the extra amount paid out of pocket catches up to what was saved on premium.
How it works
The premium saved by choosing the higher deductible is compared against the extra deductible exposure — the point where the two plans cost exactly the same is the break-even claim amount. Below it, the higher-deductible plan wins; above it, the lower-deductible plan wins.
How to use this calculator
- Enter both plans’ premiums and deductibles.
- Enter expected annual medical claims to see the direct cost comparison.
A worked example
Low-deductible plan: $6,000/year premium, $500 deductible. High-deductible plan: $4,800/year premium, $3,000 deductible. At an expected $1,000 in annual claims: the high-deductible plan costs $5,800 total versus $6,500 for the low-deductible plan — a $1,200 savings, with a break-even point at $1,700 in claims.
What the variables mean
| Variable | Meaning |
|---|---|
| Premium (low/high) | Annual cost of each plan |
| Deductible (low/high) | Out-of-pocket amount before insurance pays |
| Expected annual claims | Estimated healthcare costs for the year |
Edge cases worth knowing
The break-even point is where both plans cost the same total. Below it, the high-deductible plan wins on premium savings; above it, the low-deductible plan’s lower out-of-pocket exposure starts to win out.
This compares total cost, not risk tolerance. A lower expected average cost doesn’t account for the financial shock of an unexpectedly large claim, which the deductible caps differently on each plan.
Frequently asked questions
Does this account for coinsurance after the deductible?
No — it compares the deductible exposure directly; a full comparison including coinsurance and an out-of-pocket maximum needs this site’s HDHP vs. PPO calculator instead.
Why would anyone pick the plan with the higher total cost?
Certainty — a lower-deductible plan caps the worst case at a smaller number, which can be worth paying for even if the expected cost is somewhat higher.
