Health insurance plan comparison calculator for premiums, deductible, coinsurance, copays, out-of-pocket maximum, employer funding, and medical spending.
Health Insurance Plan Comparison Formula
A simplified annual plan cost adds premiums to in-network cost sharing and subtracts employer or HSA funding:
Annual Cost = 12 * Monthly Premium + Cost Sharing - Employer Contribution
The modeled cost sharing pays allowed spending up to the deductible, then applies coinsurance, adds expected copays, and stops at the out-of-pocket maximum:
Cost Sharing = min(OOP Max, min(Spending, Deductible) + Coinsurance * max(0, Spending - Deductible) + Copays)
Variables:
- Monthly Premium is the employee or household premium contribution
- Spending is annual in-network allowed medical spending
- Deductible is the amount paid before modeled coinsurance begins
- Coinsurance is the member percentage after the deductible
- Copays is the estimated annual amount of other in-network cost sharing
- OOP Max is the annual in-network out-of-pocket maximum
- Employer Contribution is plan-specific HSA, HRA, or other funding
The break-even calculation searches for an allowed-spending amount where the two modeled annual costs are equal.
Health Plan Cost Comparison Example
Plan A has a $450 monthly premium, $2,000 deductible, 20% coinsurance, $7,000 out-of-pocket maximum, $500 in copays, and a $1,000 employer contribution. Plan B has a $650 premium, $1,000 deductible, 10% coinsurance, a $4,500 maximum, and $350 in copays.
| Allowed spending | Plan A net annual cost | Plan B net annual cost | Lower cost |
|---|---|---|---|
| $0 | $4,900 | $8,150 | Plan A |
| $5,000 | $7,500 | $9,550 | Plan A |
| $15,000 | $9,500 | $10,550 | Plan A |
| $40,000 | $11,400 | $12,300 | Plan A |
Example Problems
Example 1: Compare plans at expected spending.
Using the example plans, you expect $12,000 of in-network allowed medical spending.
Plan A's modeled cost sharing is $4,500 and its net annual cost is $8,900. Plan B's modeled cost sharing is $2,450 and its annual cost is $10,250, so Plan A is lower by about $1,350.
Example 2: Evaluate a high-spending year.
At sufficiently high spending, each plan eventually reaches its out-of-pocket maximum.
The maximum annual exposure is approximately annual premiums plus the out-of-pocket maximum minus employer funding, which is $11,400 for Plan A and $12,300 for Plan B in this example before noncovered care.
Frequently Asked Questions
Should I enter billed charges or allowed amounts?
Enter the insurer-negotiated allowed amount for in-network services. Provider billed charges can be much higher and generally are not the basis for in-network deductible and coinsurance calculations.
Does the out-of-pocket maximum include premiums?
No. Premiums normally do not count toward the plan's out-of-pocket maximum, which is why the calculator adds annual premiums separately.
What does this simplified model leave out?
It does not fully model family or embedded deductibles, service-specific copays, prescription tiers, noncovered care, separate out-of-network limits, or plan rules that apply copays before or after the deductible.
