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 58-year-old with self-only coverage who uses the age-55 catch-up ($1,000) to deposit $5,000 of their own money.
Assumptions
| 2027 plan year | HSA plan | PPO |
|---|---|---|
| Self-only coverage, you pay / month | $210 | $340 |
| Deductible | $3,000 | $1,000 |
| Coinsurance after deductible | 20% | 20% |
| Out-of-pocket maximum | $6,000 | $4,000 |
| Copays (annual, flat) | $0 | $0 |
| Employer HSA deposit | $500 | $0 |
| You put in the HSA | $5,000 | $0 |
| Tax rate used | 22% federal + 7.65% FICA |
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 | $2,000 | $2,538 | $5,280 | HSA plan by about $2,742 |
| Moderate year (a few tests, prescriptions) | $7,000 | $4,338 | $6,280 | HSA plan by about $1,942 |
| Big year (procedure) | $18,000 | $6,538 | $8,080 | HSA plan by about $1,542 |
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 $6,538 vs PPO $8,080. 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
- The 2027 HSA limit with catch-up is $5,500; with a $500 employer deposit, there is $5,000 of room, and the example deposits $5,000.
- You can only contribute until Medicare starts: HSA and Medicare.
- After 65, HSA money can be used for any purpose with only income tax (qualified medical expenses stay tax-free), and Medicare Part B, D and Medicare Advantage premiums are qualified expenses.
- Retiree health costs are large and uncertain; the HSA plan shifts risk to your own account, the PPO shifts it to the insurer.
If you are retiring before 65, the marketplace or COBRA may be your coverage; see COBRA vs marketplace.
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.