A high-deductible health plan (HDHP) with a health savings account (HSA) usually saves money if you are mostly healthy and have some savings for a surprise bill. A PPO is usually better if you see doctors often, take costly medicines, or want predictable costs. Here is how to decide during benefits enrollment.
How the two plans differ
A PPO costs more per paycheck but less when you see a doctor. An HDHP costs less per paycheck but more when you see a doctor, and it lets you open an HSA.
Cost per paycheck: PPO is higher; HDHP is lower.
Deductible (what you pay before insurance helps): PPO is lower; HDHP is higher, at least $1,750 for one person or $3,500 for a family in 2027.
Regular doctor visit: PPO is usually a set copay; with an HDHP you pay full price until you reach the deductible.
Checkups and screenings: free on both plans.
Most you would pay in a year (2027): PPO up to $12,000 for one person or $24,000 for a family; HDHP up to $8,700 or $17,400.
Savings account: PPO usually has none; the HDHP comes with an HSA you keep for life.
Both plans often use the same doctors, so check before assuming you would need to switch.
Why the HSA matters
The HSA is the main reason to pick an HDHP. It is a savings account for medical costs with three tax breaks: money goes in tax-free, grows tax-free, and comes out tax-free for medical bills.
It never expires. Unused money rolls over every year and stays yours if you change jobs.
It can grow. You can invest the balance, much like a 401(k).
It helps in retirement. After 65 you can spend it on anything; non-medical spending is taxed as regular income.
2027 limits: $4,500 for one person or $9,000 for a family, plus $1,000 extra if you are 55 or older. Money your employer adds counts toward the limit.
Two notes: California and New Jersey residents get the federal tax break but not a state one. And since 2026, many bronze and catastrophic marketplace plans also qualify for an HSA.
A quick example
In this example, the HDHP is cheaper in light and moderate years, and the PPO is cheaper in a very expensive year.
The setup, for one person: the PPO costs $125 a month with a $500 deductible and a $3,000 yearly max. The HDHP costs $50 a month with a $2,000 deductible and a $5,000 yearly max, and the employer adds $500 to the HSA. Both plans pay 80% of bills after the deductible.
Light year ($500 in bills): PPO $2,000 vs. HDHP $600. The HDHP saves $1,400.
Moderate year ($4,000 in bills): PPO $2,700 vs. HDHP $2,500. The HDHP saves $200.
Surgery year ($30,000 in bills): PPO $4,500 vs. HDHP $5,100. The PPO saves $600.
Total cost = a year of premiums + your share of the bills − the employer's HSA money. If you also put $2,000 of your own pay into the HSA, you would save roughly $400 to $600 in taxes, which can erase the PPO's edge even in a big year.
Your benefits enrollment checklist
Work through these with your plan documents in hand.
Costs
A full year of premiums for each plan (cost per paycheck × number of paychecks)
Each plan's deductible and yearly out-of-pocket maximum
How much your employer adds to the HSA
Your total cost in a light, moderate and bad year
Your health
Doctor visits, therapy and prescriptions you expect next year
Big events ahead, such as a baby, surgery or ongoing treatment
The price of your regular medicines under each plan
Your budget
Could you pay the full deductible without using a credit card?
Can you afford to put money into the HSA each paycheck?
Your doctors
Your doctors, hospital and pharmacy are in network for each plan
Coverage away from home, such as travel or kids at college
HSA rules
You are not on Medicare and no one claims you as a dependent
Neither you nor your spouse has a regular FSA (one just for dental and vision is fine)
Turning 65 soon? HSA deposits must stop when Medicare starts
Age 55 or older? You can add $1,000 extra each year
The bottom line
Pick the plan with the lowest total yearly cost that you could still afford in a bad year. If you choose the HDHP, fund the HSA: that is where most of its value comes from.
This article is general information, not tax or financial advice. Talk with a tax professional about your situation.
Sources: 2027 HSA and HDHP limits (Mercer, summarizing IRS Rev. Proc. 2026-24) · IRS Notice 2026-5 on bronze and catastrophic plans (KPMG) · California HSA tax treatment (Franchise Tax Board)