A single, healthy 30-year-old on a PPO is paying for insurance they do not use. The HDHP plus HSA is the cheaper plan in a good year and the account keeps the difference. Over five years the gap is four figures.
That is the claim. Here is the math, with the 2026 numbers and the assumptions labeled.
The 2026 Numbers
From IRS Revenue Procedure 2025-19, plus the catch-up amount from Publication 969:
| 2026, self-only coverage | Amount |
|---|---|
| HSA contribution limit | $4,400 |
| HDHP minimum deductible | $1,700 |
| HDHP out-of-pocket maximum | $8,500 |
| Catch-up contribution, age 55+ | $1,000 |
From the KFF 2025 Employer Health Benefits Survey:
| 2025 averages, single coverage | Amount |
|---|---|
| Total premium, all plan types | $9,325 |
| Worker's share of premium | $1,440 |
| Deductible, workers with a general deductible | $1,886 |
| Total premium, HDHP with savings option | $8,620 |
The averages hide the spread. Your employer's PPO and HDHP could be $500 apart or $2,500 apart on the worker share. The benefits packet has the real number. Use it.
The Worked Example
Assumptions, not sourced figures:
- ●PPO worker premium share: $1,440 a year, the KFF average.
- ●HDHP worker premium share: $840 a year. A $600 gap, an assumption.
- ●Employer HSA contribution: $500 a year.
- ●Marginal tax rate on HSA contributions: 22% federal plus 7.65% payroll, since contributions through payroll skip both.
- ●Medical spend: $600 a year. Two office visits and a prescription.
- ●PPO copays on that care: $150 a year.
- ●Premiums are pre-tax on both plans through a Section 125 plan. The tax effect of the premium difference is counted below.
- ●The single person contributes the $600 premium savings plus $2,000 more to the HSA.
Year one, PPO. Premium $1,440. Two copays and a prescription, call it $150 out of pocket. Total cost $1,590. Nothing saved.
Year one, HDHP. Premium $840. The $600 of care is paid from the HSA at the negotiated rate, before the deductible is met. Total cost $1,440 in premium and care.
That looks like a $150 win. It is bigger than that.
The HDHP person put $2,600 into the HSA through payroll. At 29.65% combined federal and payroll tax, that is $771 in tax not paid. The employer added $500. After the $600 of care, the account holds $2,500.
Year one, all in: the PPO person is out $1,590 and holds nothing. The HDHP person is out $1,440 in cash, kept $771 in tax, and holds $2,500.
Five Years
Same assumptions every year. No investment growth counted, to keep it conservative.
| PPO | HDHP plus HSA | |
|---|---|---|
| Premiums paid, 5 years | $7,200 | $4,200 |
| Care paid out of pocket, 5 years | $750 | $0, paid from HSA |
| Own HSA contributions, 5 years | $0 | $13,000 |
| Tax not paid on contributions | $0 | $3,855 |
| Employer HSA contributions | $0 | $2,500 |
| Care paid from HSA, 5 years | $0 | $3,000 |
| HSA balance after 5 years | $0 | $12,500 |
Cash out of pocket over five years: PPO $7,950. HDHP $17,200, but $12,500 of that is still in the account. Net of the balance, the HDHP person is out $4,700 and has $3,855 in tax savings on top.
The honest comparison is cash spent minus assets held. PPO: $7,950 spent, $0 held. HDHP: $4,700 spent after netting the account, plus $3,855 kept from taxes.
One adjustment. The PPO's higher premium is also pre-tax. That is worth about $890 back to the PPO person over five years. Net that out and the gap is still over $6,000 in five years, before any investment growth.
Invest the balance and the number gets larger. The triple tax advantage guide runs those projections.
The Year It Stops Being True
The HDHP loses in a bad year. The out-of-pocket maximum is $8,500 in 2026. A PPO with the KFF-average $1,886 deductible and, say, a $4,000 out-of-pocket max caps a bad year lower.
So the real question is not "which plan is cheaper." It is "can I cover $8,500 in a bad year." If the HSA balance plus savings cannot, the PPO is insurance against a number you cannot pay. That is a fair trade.
Single and healthy is a bet that the bad year does not come while the balance is small. Four years in, the example balance passes the out-of-pocket max. From then on the HDHP person self-insures the bad year with pre-tax money.
Three Things That Flip the Answer
- ●A recurring prescription over $200 a month. That spend hits the deductible every year. Run the numbers with the real drug cost.
- ●A planned surgery or a baby in the next two years. See the pregnancy post.
- ●An employer that prices the HDHP close to the PPO. If the premium gap is under $300 and the employer HSA contribution is $0, the case is thin.
Run your own numbers in the HDHP vs PPO calculator. It takes the real premiums from your packet, not the averages.
What the HSA Needs From You
The math only works if the receipts survive. Every dollar you pull from the HSA later has to match a receipt for care you paid.
Tripl is an HSA receipt tracker. Photograph each receipt. Tripl reads the provider, the date, and the amount, and tracks what has been reimbursed.
Stored in the cloud, mirrored to your own Google Drive or Dropbox. Two copies, two places.
Tripl is $30 per year for the first 100 sign-ups. After that, $50 a year.
Related
- ●HDHP vs PPO With Kids
- ●HDHP vs PPO When Planning a Baby
- ●Switching From PPO to HDHP
- ●Open Enrollment 2027: How to Pick the HSA Option
*This is educational content, not financial or tax advice. Consult a qualified professional before making decisions about your HSA.*