Understanding Health Insurance Plans
Choosing the right health insurance plan is one of the most important financial decisions you'll make each year. The wrong choice can cost you thousands. This calculator helps you compare plans based on your expected medical usage.
The Metal Tier System
| Tier | Monthly Premium | Deductible | Coverage |
|---|---|---|---|
| Bronze | Lowest | Highest | 60% plan / 40% you |
| Silver | Medium | Medium | 70% plan / 30% you |
| Gold | Higher | Lower | 80% plan / 20% you |
| Platinum | Highest | Lowest | 90% plan / 10% you |
What This Means
Key Terms to Understand
Premium
The monthly amount you pay for coverage, regardless of whether you use medical services. This is your guaranteed cost.
Deductible
The amount you must pay before insurance starts covering costs. If your deductible is $2,000, you pay the first $2,000 of medical bills yourself.
Coinsurance
After meeting your deductible, you split costs with insurance. 20% coinsurance means you pay 20%, insurance pays 80%.
Out-of-Pocket Maximum
The most you'll pay in a year. Once you hit this limit, insurance covers 100% of covered services. This caps your risk.
Copay
Fixed amounts for specific services ($30 for doctor visits, $50 for specialists). Sometimes applies before deductible.
HDHP and HSA: A Powerful Combo
What is an HDHP?
A High-Deductible Health Plan (HDHP) has lower premiums but higher deductibles. In 2026, minimum deductibles are $1,600 (individual) or $3,200 (family).
What is an HSA?
A Health Savings Account (HSA) is a tax-advantaged account only available with HDHPs. It offers triple tax benefits:
- Contributions reduce your taxable income
- Money grows tax-free
- Withdrawals for medical expenses are tax-free
2026 HSA Limits
| Coverage | Contribution Limit | Catch-up (55+) |
|---|---|---|
| Individual | $4,150 | +$1,000 |
| Family | $8,300 | +$1,000 |
HSA Tax Savings Example
Choosing the Right Plan
Low Medical Usage (Healthy, Young)
- Consider Bronze or HDHP plans
- Lower premiums save money monthly
- HSA builds long-term savings
- You're betting on staying healthy
- Still protected by out-of-pocket max
Moderate Medical Usage (Occasional Care)
- Silver plans often provide best value
- Balanced premiums and coverage
- Copays for routine visits helpful
- Lower deductible than Bronze
High Medical Usage (Chronic Conditions)
- Gold or Platinum may be worth it
- Higher premiums but lower out-of-pocket
- Lower deductible means coverage kicks in sooner
- You'll likely hit out-of-pocket max anyway
Don't Just Pick the Cheapest Premium
Special Considerations
Prescription Drug Coverage
If you take expensive medications, check the plan's formulary (drug list) and tier structure. Some plans cover specialty drugs much better than others.
Network (HMO vs PPO)
HMO: Lower cost but must use in-network doctors and get referrals. PPO: Higher cost but more flexibility to see any doctor.
Family Coverage
Family plans have higher premiums but cover everyone. Compare to individual plans for each family member.
Frequently Asked Questions
Q: When can I change my health insurance?
A: During Open Enrollment (usually November-December) or within 60 days of a Qualifying Life Event (job loss, marriage, birth, moving).
Q: Is it better to have low premium or low deductible?
A: Depends on your expected usage. Low usage = low premium often wins. High usage = low deductible often wins. Calculate both scenarios to compare.
Q: What happens if I don't hit my deductible?
A: You pay full price for covered services until you do. Preventive care (annual checkups, vaccines) is usually covered at 100% even before deductible.
Q: Can I keep my HSA if I switch plans?
A: Yes! HSA money is yours forever. You can continue to use it for medical expenses. You just can't contribute new money unless you have an HDHP again.
Q: What counts toward my deductible?
A: Most medical services, procedures, and sometimes prescription drugs. Premiums, cosmetic procedures, and non-covered services do not count.
Q: Should I max out my HSA even if I don't need it now?
A: Often yes! HSA funds roll over forever and can be invested. After age 65, HSA works like a traditional IRA for non-medical expenses. It's a powerful retirement tool.
Annual Plan Review Checklist
- Estimate your expected medical expenses for next year
- List any known procedures or prescriptions
- Compare 3-4 plan options available to you
- Calculate total annual cost for each plan
- Factor in employer contributions and HSA benefits
- Check that your doctors are in-network
- Review prescription drug coverage
- Make your selection before deadline
Health insurance costs and coverage vary significantly by location, employer, and individual circumstances. The calculations provided are estimates based on your inputs. Always review official plan documents for exact coverage details.