Health insurance basics: HDHP, PPO, HSA
The difference between premium, deductible, and out-of-pocket max is the entire game.
The four numbers on every plan
- •PREMIUM — what you pay every month, even if you never use the plan.
- •DEDUCTIBLE — what you pay out of pocket before insurance starts paying.
- •COPAY / COINSURANCE — your share AFTER deductible (often 20%).
- •OUT-OF-POCKET MAX — the worst case for the year. Once you hit it, insurance pays 100%.
HDHP vs PPO in plain English
- •HDHP (high-deductible) — low premium, high deductible, lets you open an HSA. Best for healthy people.
- •PPO — higher premium, lower deductible, broader network. Best if you use healthcare often.
Tax-deductible going in, tax-free growth, tax-free withdrawals for qualified medical. Open at Fidelity (no fees). 2026 contribution limit: $4,400 single / $8,750 family.
Until 26, the ACA lets you stay on a parent's plan. If theirs is good and you'd be on a marketplace plan otherwise, that's often the right call until your job offers something better.
Real life: meet Healthy 24-year-old picks HDHP+HSA
Eli (24, healthy) chose HDHP+HSA over PPO. Premium: $80/mo (vs $260). Deductible: $3,200 (vs $500). Eli puts the $180/mo savings into the HSA — $2,160/year tax-free. After 5 healthy years: $14,000+ in the HSA.
$180/mo HSA · $14k+ in 5 years tax-free
Takeaway
If you're healthy, HDHP+HSA usually wins. If you use healthcare often, PPO usually wins. Either way, hit the OOP max math BEFORE picking.
Why do many healthy young adults pick HDHP + HSA?
Takeaway: The four numbers (premium / deductible / coinsurance / OOP max) decide the entire question.
Try together: Pull up the learner's open-enrollment options. Calculate the worst-case yearly cost (premium × 12 + OOP max) for each plan and pick on math, not 'lower premium.'