Health Plan Cost Comparison

The cheapest premium is not always the cheapest plan. Enter the plans your employer offers and a guess at next year’s medical bills; the calculator adds premiums, what you pay toward the bills, employer HSA or FSA money and the tax you save, and shows which plan costs least at every level of care.

Estimating Your Numbers

The calculator is only as good as two guesses: your tax rate and next year’s medical bills. Both can come from records you already have.

Your tax bracket

Use your marginal bracket — the rate on your last dollar of income — not your effective rate, which is total tax divided by income. A pre-tax dollar comes off the top of your income, so it saves tax at the top rate. Using the effective rate understates what the HSA, FSA and pre-tax premiums are worth.

• Federal: find taxable income on last year’s Form 1040 (line 15) and look it up in the bracket table for your filing status.[1] If you are within a few thousand dollars of the next bracket down, use the lower one — pre-tax deductions may pull you into it.
• State: use the top rate your state return applied to you. A flat-tax state has only one rate.
• When it changes: last year is a good guide only if income will be about the same. A raise, a spouse returning to work or a job change means estimating next year’s taxable income instead.

Your medical bills

Your current insurer already has the number. Most member websites have a claims history or year-end summary; the figure you want is the allowed amount — what the plan and you paid together — not the billed charges, which are higher, and not just what you paid. Leave out preventive visits, which are free on every plan.

• Average two or three years if they were ordinary years. One year can mislead in either direction.
• Add anything you already know is coming: a planned surgery, a new prescription, physical therapy, a pregnancy. Pregnancy, childbirth and postpartum care averaged $20,416 in total spending for people with employer coverage, of which they paid $2,743 out of pocket.[2] The “Having a baby” button loads that figure.
• Take out what will not repeat: last year’s broken arm is not next year’s expense.

Planning for a bad year

Health spending is lopsided. In 2023 the half of Americans who spent the least averaged $433 a year, while the top 5% averaged $72,918 and accounted for nearly half of all spending.[3] Most years are quiet; the expensive ones are very expensive.

That is why you do not need an average figure for a bad year. A hospital stay with surgery runs well past most plans’ out-of-pocket maximums, and once bills pass that point every plan costs the same thing: its premiums plus its out-of-pocket maximum, minus employer money and tax savings. The worst-case row in the table is exactly that number, and the Bad year button sets the bills past the point where every plan has maxed out.

So the useful comparison is two numbers per plan:

1. Your expected year — the total at your estimated bills.
2. Your worst year — the worst-case row.

If one plan wins both, the choice is easy. If the cheaper plan in a normal year has the higher worst case, the difference between the two worst cases is what you would be paying the pricier plan to protect you against a bad year. The cheapest-plan line under the chart gives the break-even: the level of bills where the pricier plan starts winning. If your realistic estimate sits well below it, the protection is expensive. Either way, keep cash or an HSA balance that could cover the out-of-pocket maximum of the plan you choose.

Watch the “bills that reach the out-of-pocket max” row. A plan with 10% coinsurance and a high maximum can take much larger bills to reach its cap than a plan with 20% coinsurance and a low one.

How the Calculator Gets Its Number

Each plan’s yearly cost is five pieces added together:

1. Premiums for the year: the rate-sheet figure times the number of paychecks it comes out of. A biweekly premium is 26 deductions, not 24 — multiplying a per-paycheck number by 12 understates the year by more than half.
2. Minus the tax the premium saves: employer premiums are usually deducted before federal and state income tax and before Social Security and Medicare tax.[4] At a 22% bracket, a 5% state rate and 7.65% payroll tax, a $100 premium costs about $65 of take-home pay.
3. Plus your cost for the bills: everything up to the deductible, then the coinsurance percentage on the rest, plus any copays, never more than the out-of-pocket maximum.
4. Minus employer HSA or FSA money: an employer deposit is money you did not have to earn. HSA money is yours the day it lands, spent or not.[5]
5. Minus the tax saved on your own contributions, plus any FSA money forfeited: an HSA you fund through payroll skips income and payroll tax, and whatever you do not spend stays in the account. A health FSA forfeits what is left unless the plan offers a carryover or a grace period.[5]

That last step is where most comparisons go wrong. Counting your HSA contribution as an expense makes the high-deductible plan look worse the more you save in it, which is backwards — the contribution is savings, and only the part that pays a bill is spent.

Per Paycheck, Per Month, Per Year

Rate sheets usually print the per-paycheck deduction because that is what you see on a pay stub. The conversion matters more than it looks: 26 biweekly deductions equal 2.17 a month on average, so a $300 biweekly premium is $7,800 a year, not the $3,600 you get by treating it as monthly.

A biweekly payroll lands 27 paydays in some years. Whether a 27th premium is taken depends on the employer — many divide the annual premium over 26 deductions and skip the extra check, and benefits guides often say so in a footnote. If yours does take 27, choose that option and the calculator will count it.

HSA and FSA elections are annual figures, so enter them that way even if they come out of every paycheck.

Picking the Contribution Amounts

The calculator starts your personal HSA or FSA contribution at the plan’s deductible. If you have any meaningful medical bills, the deductible is money you will pay anyway — running it through the account first means paying it with pre-tax dollars instead of take-home pay. Put in what you know you will spend. With an HSA, contributing more than you spend costs nothing, because the balance stays yours. With an FSA, elect only what you are confident you will use, since the rest can be forfeited.

For 2027 the HSA limit is $4,500 for self-only coverage and $9,000 for family coverage, plus $1,000 from age 55, and employer money counts toward that limit.[6] A plan only qualifies for an HSA if its 2027 deductible is at least $1,750 self-only or $3,500 family.[6] The calculator flags an HSA paired with a deductible below that line.

The health FSA limit for 2026 is $3,400, and a plan that allows a carryover can let up to $680 roll into the next year.[1] The 2027 figures are set by the IRS each fall. Plans may offer a carryover, a grace period of up to two and a half months to spend the balance, or neither.[5] If yours has a grace period, choose the carryover option and enter what you expect to spend in those extra weeks.

What the Calculator Does Not Model

• Separate prescription deductibles. Some plans have one deductible and one out-of-pocket maximum for medical care and another for drugs. Add expected drug coinsurance to the copays box, and remember the worst case is both maximums together.
• Family deductibles. Enter the family deductible and maximum for family coverage. Some plans also stop one person’s costs at an individual amount inside the family total; the calculator treats the family figure as one pool, which slightly overstates costs on those plans when one person has most of the bills.
• Copay-only plans. An HMO that charges flat copays does not scale with a dollar figure. Enter a deductible and coinsurance of 0 and put your estimated copays for the year in the copays box.
• Networks and out-of-network care. The math assumes in-network prices. A plan is only cheaper if your doctors are in it.
• Investment growth. An HSA balance can be invested and spent tax-free on medical costs decades later. That makes the HSA more valuable than this one-year view shows.

Related Reading and Worksheets

The reasoning behind the high-deductible trade-off is in our guide to insurance basics, and the HSA’s place among other accounts is in tax-advantaged accounts. Comparing jobs rather than plans? White-collar compensation covers the whole benefits package, and the job offer comparison worksheet puts it in a spreadsheet. Once you have chosen, the HSA contribution log keeps you under the limit and the medical claim tracker builds next year’s spending estimate.

Field Guide

Every field in the calculator, what it means, where to find the number and how to estimate it. The ⓘ next to each field opens its entry.

Premiums on the rate sheet are

What it isHow your employer prints the premium: per paycheck, per month or per year.

Where to find itThe premium table in your open enrollment guide or benefits website. Headings such as “bi-weekly” or “per pay period” mean per paycheck.

How to estimateNothing to estimate — match what the sheet says, then copy the numbers exactly.

Paychecks the premium comes out of

What it isHow many paychecks a year carry the premium deduction.

Where to find itA footnote on the rate sheet often states it (“withheld over 26 pay periods”). Otherwise count last year’s pay stubs that show the deduction.

How to estimateBiweekly pay is usually 26. In a year with 27 paydays, choose 27 only if your employer actually takes a 27th premium.

Federal tax bracket

What it isYour marginal rate — the rate on your last dollar of taxable income. Pre-tax premiums and contributions save tax at this rate.

Where to find itTaxable income on last year’s Form 1040 (line 15), looked up in the bracket table for your filing status.[1] Married couples filing jointly use the household figure.

How to estimateUse last year if income will be similar. Not your effective rate (total tax divided by income), which is lower and understates the savings.

State income tax rate

What it isYour top state income tax rate.

Where to find itYour state return or your state’s rate table. Flat-tax states have one rate; some states have none.

How to estimateIf your city or county also taxes income, add its rate in.

Premiums come out before tax

What it isWhether your premiums are deducted before income and payroll taxes are calculated, through what employers call a Section 125 or cafeteria plan.[4]

Where to find itYour pay stub lists medical premiums under pre-tax deductions; the benefits guide usually says so too.

How to estimateLeave checked for almost any employer plan. Uncheck for coverage you buy on your own.

Payroll deductions skip Social Security and Medicare tax

What it isPre-tax payroll deductions also avoid the 6.2% Social Security and 1.45% Medicare taxes.[4]

Where to find itYour pay stub shows Social Security (OASDI) and Medicare withholding.

How to estimateUncheck if your pay is above the Social Security wage base for most of the year,[7] or if your job is not covered by Social Security (some state and local government jobs). Either way the remaining saving is only the 1.45% Medicare tax.

State taxes HSA contributions

What it isA small number of states tax HSA contributions even though the federal government does not.

Where to find itYour state income tax instructions, under health savings accounts.

How to estimateMost people leave this unchecked.

Total medical bills for the year

What it isThe total cost of the care your household expects to use, before insurance pays anything — the price the plan has agreed to, not what you paid.

Where to find itYour insurer’s member website: the claims history or year-end summary. Use the “allowed amount” column, not “billed”.

How to estimateAverage the last two or three ordinary years for everyone on the plan. Add known events (a baby, a surgery, a new diagnosis), drop one-time ones, and leave out preventive care, dental and vision. Then try the Bad year button.

Premium (your cost)

What it isWhat you pay for the plan, deducted from each paycheck. The label follows the choice at the top of the calculator.

Where to find itThe rate sheet. Use the employee column, not the employer’s share, and the row for your coverage level — individual, employee plus spouse, employee plus children or family.

How to estimateNo estimate needed. Make sure every plan uses the same coverage level.

Deductible

What it isWhat you pay for covered care before the plan starts sharing costs.

Where to find itThe plan comparison chart in your benefits guide, or the Summary of Benefits and Coverage every plan must provide. Use the in-network figure for your coverage level — the family deductible for family coverage.

How to estimateCopy it. If the plan has a separate prescription deductible, see the note on what the calculator does not model.

Out-of-pocket max

What it isThe most you pay for covered in-network care in a year: deductible, coinsurance and copays together. Premiums do not count toward it.

Where to find itSame chart as the deductible, usually labeled “out-of-pocket limit” or “OOP max.”

How to estimateCopy the in-network figure for your coverage level. If prescriptions have their own limit, your true worst case is both together.

Your coinsurance

What it isThe percentage of each bill you pay after meeting the deductible.

Where to find itThe plan chart. “Plan pays 80%” means you pay 20 — enter 20.

How to estimateUse the figure for most services. A copay-only plan is 0.

Copays for the year

What it isFlat fees per visit or prescription, such as $10 for a doctor visit or $20 for a brand-name drug.

Where to find itThe plan chart and the pharmacy benefits table.

How to estimateLeave at $0 for deductible-and-coinsurance plans. For an HMO, Kaiser Permanente plans in particular, multiply the visits and prescriptions you expect by their copays.

Account with this plan

What it isThe tax-advantaged account paired with the plan. An HSA requires an HSA-eligible high-deductible plan; a health FSA can pair with most other plans.[5]

Where to find itThe plan chart usually has an “HSA eligible” row.

How to estimateChoose None if you will not use one. A limited-purpose FSA for dental and vision is not modeled.

Yearly contribution (employer)

What it isMoney your employer puts into your HSA or FSA for the year.

Where to find itThe HSA or FSA page of the benefits guide. It often differs for individual and family coverage, and may include wellness rewards.

How to estimateUse the full-year amount. Employer HSA money counts toward your annual HSA limit.

Yearly contribution (personal)

What it isWhat you put into the account from your paychecks for the year.

Where to find itYour own election. Annual limits are shown in the benefits guide.

How to estimateStarts at the deductible, the amount you will pay first if you have real bills. With an HSA, more is fine because the balance stays yours. With an FSA, elect only what you are sure you will spend.

Coverage

What it isSelf-only means the plan covers just you; family means it covers anyone else too. This sets the HSA limit.[6]

Where to find itThe coverage level you are electing.

How to estimateEmployee plus spouse and employee plus children both count as family.

Age 55 or older

What it isAn extra $1,000 HSA contribution allowed from age 55.[6]

Where to find itYour age by the end of the year.

How to estimateCheck it if you turn 55 or older during the year.

Unspent FSA money

What it isWhat happens to FSA money left at year end: forfeited, partly carried into next year, or spendable during a grace period of up to two and a half months.[5]

Where to find itThe FSA page of the benefits guide.

How to estimateFor a carryover, enter the plan’s carryover limit. For a grace period, choose carryover and enter what you realistically expect to spend in those extra weeks.