Which health plan actually costs less?
A low premium with a high deductible looks cheap until you get sick. Enter both plans and your expected care, and see the total yearly cost of each, which one wins, and the exact spending level where they break even.
The two plans
What this means for you
Premium vs cost of care
Where each plan's total cost comes from
Total cost as your care grows
The verdict
Total cost at different levels of care
Total yearly cost is 12 monthly premiums plus your share of care (deductible, then coinsurance, capped at the out-of-pocket max).
| Care used | Plan A total | Plan B total | Difference | Cheaper |
|---|
The tradeoff, explained
The Premium-Deductible Tradeoff
Lower premium = higher deductible. Higher premium = lower deductible. Total annual cost depends on usage. Cost-conscious decision requires knowing expected usage.
Three Scenarios to Compare
Healthy year (minimal medical): low-premium HDHP wins easily. Moderate usage: depends on numbers. Catastrophic year: both hit OOP max, lower premium wins.
HSA Bonus for HDHPs
HDHP qualifies for HSA (additional tax savings). Often tips analysis toward HDHP even when projected medical close to break-even point.
Don't Forget Network
Cheaper plans often have narrower networks. Verify your doctors are in-network before choosing based purely on premium/deductible math.
Common questions
Should I always pick the lowest premium?
No, depends on usage. Healthy years win with low premium. Heavy usage wins with higher premium / lower deductible.
What's break-even point?
Medical cost level where total annual costs equal between plans. Above it, higher-premium plan wins. Below it, lower-premium wins.
Does this account for HSA tax savings?
No, pure plan comparison. HDHP additional 20-30% tax savings often pushes toward HDHP even at break-even.
What about copays and coinsurance?
This simplified calculator treats deductible only. Real plans have post-deductible coinsurance and copays.
How accurate are 'projected costs'?
Use last 2-3 years average + known upcoming procedures. Look at billed amounts (not just your share) to estimate.
Estimates for planning only. This model uses deductible, coinsurance and out-of-pocket max on the allowed amount of care and does not include copays, HSA tax savings, or network differences. Confirm your plan's exact terms and that your doctors are in-network before deciding.