Open enrollment guide · Updated Oct 27, 2026

HDHP vs PPO: How to Find Your Break-Even Point (2026)

An HDHP has lower premiums but a higher deductible. A PPO costs more up front but less when you use care. The break-even is the amount of medical bills where both plans cost you the same per year.

The formula

For each plan: yearly cost = premiums + out-of-pocket for your bills − employer HSA deposit − tax saved on your HSA contributions. Plot that for bills from $0 to $30,000; where the lines cross is your break-even.

Worked example (single)

PPO: $1,612 premiums, $750 deductible, 20% coinsurance, $3,500 OOP max. HDHP: $546 premiums, $3,400 deductible, 20%, $6,500 OOP max, $750 employer HSA.

• $0 bills: PPO $1,612 vs HDHP −$204 → HDHP ahead by ~$1,800.
• $4,000 bills: PPO ~$3,012 vs HDHP ~$3,316 → roughly even.
• $20,000+ bills: PPO $5,112 (premium + OOP max) vs HDHP $6,296 → PPO ahead by ~$1,200.

So this person breaks even around $3,500–4,000 of medical bills a year. Add HSA tax savings (e.g., $2,000 contributed × ~30% ≈ $600) and the HDHP stays ahead even longer.

Rules of thumb

• Healthy, with some savings? HDHP + HSA usually wins.
• Planned surgery, pregnancy or expensive ongoing prescriptions? Price the PPO carefully.
• Can't cover the HDHP deductible in cash? Lean toward the lower deductible plan.

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