How to use this health insurance plan comparison calculator
Enter the annual in-network covered allowed medical spending you want to model. This is a shared assumption for both plans, which makes it possible to compare how two different cost-sharing structures could respond to the same amount of covered care.
Then enter the details for Plan A and Plan B: the monthly premium you actually pay, deductible, coinsurance percentage you pay after the deductible, and out-of-pocket maximum.
Use figures that apply to the same type of coverage whenever possible. For example, comparing an employee-only premium with a family premium would not provide a meaningful cost comparison even if the deductible and coinsurance values were entered correctly.
Try more than one medical-spending assumption if your future health care use is uncertain. A plan that costs less during a low-spending year may not remain the lower-cost option when substantially more covered care is needed.
Understanding your results
Annual premium cost represents what you pay to keep the health insurance plan in force over the year. Premiums are a cost of having coverage whether you use little medical care or a great deal.
Estimated medical out-of-pocket cost represents the portion of the modeled covered medical spending that you would pay under the deductible, coinsurance, and out-of-pocket maximum assumptions entered for that plan.
Total annual modeled cost brings the premium and estimated medical out-of-pocket cost together. This is often more useful for comparing two plans than looking at the premium or deductible alone.
A plan with a lower premium may therefore have a higher total modeled cost if its deductible or coinsurance leaves you responsible for substantially more of the medical spending entered. Conversely, a plan with a higher premium may cost more during a year with relatively little medical care even if it provides stronger cost-sharing protection when spending rises.
The comparison is intended to reveal that tradeoff rather than automatically favoring the plan with the lowest premium, lowest deductible, or lowest out-of-pocket maximum.
What can affect your health insurance cost comparison
The premium you actually pay
Health insurance premiums can be shared between an employer and employee, reduced by a subsidy, or paid entirely by the insured person depending on the source of coverage. For this comparison, enter the monthly premium that you are responsible for paying for each plan.
The premium matters even in a year with no modeled medical spending because it is the recurring cost of maintaining coverage.
The deductible
A deductible is the amount of applicable covered medical spending you generally pay before the plan begins applying its post-deductible cost-sharing rules. A higher deductible can expose you to more upfront medical cost, but it may sometimes accompany a lower premium.
A lower deductible is not automatically better. Whether it provides good value depends partly on how much additional premium you must pay to obtain it and how much medical care you expect to use.
Coinsurance after the deductible
Coinsurance determines how the cost of applicable covered care is shared after the deductible stage. If your coinsurance is 20%, for example, you generally remain responsible for that share of applicable costs while the plan pays the remaining share, subject to the plan rules and out-of-pocket limit.
Two plans with similar deductibles can therefore produce different out-of-pocket costs when their coinsurance percentages differ.
The out-of-pocket maximum
The out-of-pocket maximum is especially important when considering a high-spending year. It limits qualifying cost sharing for covered in-network care under the assumptions represented by the calculator.
Premiums are separate from that limit. Reaching an out-of-pocket maximum does not mean your annual health insurance cost has been limited to that number because you still pay the premiums required to maintain coverage.
The amount of covered medical spending
The plan that looks less expensive can change as medical spending changes. When very little care is used, premium differences may dominate the comparison. At higher spending levels, the deductible, coinsurance, and out-of-pocket maximum can become increasingly important.
Because future health care use is uncertain, it can be helpful to run several scenarios rather than relying on one spending estimate as a prediction.
Premiums and medical cost sharing answer different questions
The premium tells you how much the plan costs to maintain. The deductible, coinsurance, and out-of-pocket maximum describe different parts of what you may have to pay when covered medical care is actually used.
Looking at only one of these numbers can produce a misleading comparison. A low-premium plan can require more spending before insurance pays a substantial share of care, while a richer plan may charge more every month in exchange for lower cost exposure when care is needed.
The useful question is not simply, “Which plan has the lowest deductible?” It is how much each plan may cost overall under the same medical-spending scenario and how much financial risk you are comfortable taking on.
Why the out-of-pocket maximum matters in a high-cost year
A serious illness, surgery, hospitalization, or other major medical event can make the out-of-pocket maximum far more important than it appears during routine health care use.
When comparing plans for financial protection, consider the combination of annual premiums and the out-of-pocket maximum. That provides a useful high-level view of the amount that could be at stake under the plan itself during a year with substantial qualifying in-network medical expenses.
It is still not a guarantee of your absolute maximum health care spending. Non-covered care, services outside applicable network protections, and other expenses that do not count toward the plan's out-of-pocket maximum can remain your responsibility.
Comparing Plan A and Plan B
The calculator applies the same annual covered medical-spending assumption to both plans so that the comparison focuses on their different premium and cost-sharing structures.
Review the annual premiums, estimated medical out-of-pocket costs, and total annual modeled costs together. One plan may save money on premiums while shifting enough additional medical cost to you that the apparent savings disappear at the spending level entered.
Then change the medical-spending assumption and compare the plans again. A low-use scenario can help illustrate the effect of premiums, while moderate- and high-use scenarios can show how the deductible, coinsurance, and out-of-pocket maximum change the result.
Cost should not be the only factor in choosing health insurance. Provider networks, prescription coverage, covered services, referral requirements, plan administration, and other benefits can be materially different even when two plans appear similar based on the four financial inputs modeled here.
Important assumptions and limitations
This calculator is a simplified comparison of two health insurance cost-sharing structures. It models the monthly premium you pay, deductible, post-deductible coinsurance, out-of-pocket maximum, and one shared amount of annual in-network covered allowed medical spending.
The modeled medical spending should be understood as covered in-network allowed spending, not a provider's unrestricted billed charge. Actual insurer-negotiated allowed amounts and claim processing determine the costs that apply under a real policy.
The calculator does not model copayments, prescription-drug formularies or separate drug cost sharing, network differences, non-covered medical care, or detailed family deductible and out-of-pocket structures.
Employer HSA or HRA contributions are not included. Premium subsidies and tax effects are also outside the comparison. If any of these materially affect the plans you are considering, evaluate them separately before deciding which option is less expensive for you.
Premiums are not counted toward the modeled medical out-of-pocket maximum. The out-of-pocket maximum applies to qualifying cost sharing under the assumptions represented here, while premiums remain a separate cost of maintaining coverage.
The annual medical-spending amount is a scenario you enter, not a forecast of future health care use. Actual medical needs are uncertain and can vary significantly from year to year.
Real health plans can contain copays, service-specific deductibles, separate prescription benefits, exclusions, prior-authorization requirements, embedded individual and family limits, and other provisions that materially change claim costs.
Use the calculator to compare the broad financial tradeoff between two plan structures, then review the Summary of Benefits and Coverage, plan documents, provider network, prescription benefits, and other terms before choosing coverage.
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Look beyond the health plan's monthly premium
The cost of health insurance depends on both what you pay to keep the coverage and what you may have to pay when you actually need care. Understanding deductibles, coinsurance, networks, and out-of-pocket limits can make plan comparisons much more meaningful. Visit MarketReview's health insurance section for more on evaluating health coverage.