These are made-up example plans, not recommendations. Numbers are illustrations of how the math works for one assumed situation. Your plans, prices, doctors and health will differ. A single employee in a 35% federal bracket (state tax ignored) who maxes out the HSA at the 2027 self-only limit and gets no employer contribution.
Assumptions
| 2027 plan year | HSA plan | PPO |
|---|---|---|
| Self-only coverage, you pay / month | $150 | $260 |
| Deductible | $3,000 | $1,000 |
| Coinsurance after deductible | 20% | 20% |
| Out-of-pocket maximum | $5,500 | $3,500 |
| Copays (annual, flat) | $0 | $0 |
| Employer HSA deposit | $0 | $0 |
| You put in the HSA | $4,500 | $0 |
| Tax rate used | 35% federal, no FICA savings |
Total yearly cost at three levels of care
| Year of care | Medical spending | HSA plan, net / yr | PPO, net / yr | Lower cost |
|---|---|---|---|---|
| Low-use year | $1,500 | $1,725 | $4,220 | HSA plan by about $2,495 |
| Moderate year | $6,000 | $3,825 | $5,120 | HSA plan by about $1,295 |
| Big year | $15,000 | $5,625 | $6,620 | HSA plan by about $995 |
Net cost = premiums + your share of care (deductible, then coinsurance, up to the out-of-pocket maximum, plus copays) − employer HSA money − tax savings on your HSA deposit. Worst case (both maximums reached): HSA plan $5,725 vs PPO $6,620. One plan is cheaper at every level of spending. Unspent HSA money stays yours and is not counted above.
Open this example in the HSA vs PPO calculator and change any number to match your own plans.
What matters in this situation
- Tax savings at 35% on $4,500 are $1,575. We left FICA savings out on purpose: above the Social Security wage base the 6.2% part no longer applies, so a high earner’s payroll tax savings are smaller than 7.65%.
- A high bracket makes the “HSA as a retirement account” argument stronger: unspent HSA money can be invested, and growth and qualified withdrawals are tax-free. The totals above do not count that growth. See is an HSA worth it?
- HSA contributions are not limited by income, but you must have HDHP coverage and no disqualifying coverage.
- A high earner may prefer the plan with the lower maximum if a bad year would be disruptive; the premium difference here is $1,320 a year.
If your employer offers no HSA contribution and the PPO premium is much lower, the tax advantage may not cover the difference.
Also see all HSA vs PPO situations, the four basic examples, how health plan costs work and 2027 HSA limits.
This is general information, not tax or insurance advice. Confirm details with your plan documents, the IRS and a qualified professional.
General education, not insurance, tax or legal advice. Figures from IRS and HHS publications; confirm with your plan documents.