The short answer
An HSA plan usually costs less in total when you expect low to moderate medical bills, because lower premiums, employer HSA money and tax savings outweigh the higher deductible. A PPO tends to win when you expect to hit your out-of-pocket maximum or have frequent visits with copays.
The four numbers that decide it
- Premium difference per year (you pay it no matter what).
- Employer HSA contribution (free money only the HSA plan gets).
- Your tax savings on HSA contributions (federal + state + 7.65% FICA through payroll).
- Out-of-pocket maximums (your worst case under each plan).
Total yearly cost = premiums + what you pay for care − employer HSA money − tax savings. The calculator plots this for every level of spending and marks the break-even point.
Worked example (2027, self-only)
HSA plan: $80/month premium, $3,000 deductible, 20% coinsurance, $6,000 max, employer gives $500, you put in $2,000 at a 22% tax bracket. PPO: $200/month, $1,000 deductible, 20%, $4,000 max. At $2,000 of care, the HSA plan costs about $1,867 net and the PPO $3,600. The HSA plan stays cheaper until spending gets close to the out-of-pocket maximum.
Limits: 2027 HSA limits ($4,500 / $9,000).
General education, not insurance, tax or legal advice. Figures from IRS and HHS publications; confirm with your plan documents.
FAQ
Is an HSA better than a PPO?
Often for healthy people and anyone whose employer adds HSA money. Not usually for people who expect very high bills every year.
Can I have an HSA with a PPO?
Only if the PPO itself is an HSA-eligible high-deductible plan. A regular PPO with copays before the deductible does not qualify.