Health Plan Total Cost Comparison Method, Formula & Examples

Calculation sequence

For each plan, the model applies the deductible, then coinsurance to remaining allowed spending, adds entered copays, caps member cost sharing at the entered out-of-pocket maximum, and combines that amount with premiums and funding.

Inputs and evidence

Use current written documents for every material input. The calculator supports: Market and currency, Expected in-network allowed medical spending, Plan A annual employee premium, Plan A deductible, Plan A member coinsurance, Plan A expected copays, Plan A out-of-pocket maximum, Plan A employer HSA/HRA funding, Plan A employee HSA contribution, Plan A assumed HSA tax-value rate, Plan B annual employee premium, Plan B deductible, Plan B member coinsurance, Plan B expected copays, Plan B out-of-pocket maximum, Plan B employer HSA/HRA funding, Plan B employee HSA contribution, Plan B assumed HSA tax-value rate.

Reference example

For 5,000 of allowed spending, Plan A with a 2,000 deductible and 20% coinsurance produces 2,600 of modeled cost sharing. After premium, employer funding and entered HSA tax value, its net annual cost is 4,100.

Boundary and error checks

Test zero-rate branches where available, minimum and maximum supported inputs, and a scenario in which the main result reverses. Reject blank, non-finite or out-of-range values rather than silently substituting them.

Model boundary

This simplified model cannot reproduce every service-specific copay, separate drug deductible, tier, family accumulator, network rule, balance bill, excluded care or employer tax treatment. The Summary of Benefits and Coverage and plan documents control.

Sources and review status

• CMS — Health insurance terms you should know
• CMS — Summary of Benefits and Coverage
• CMS — 2026 plan comparison tip sheet

Sources and model boundaries checked 2026-10-08. This new opportunity-map expansion has automated formula, fixture and source QA but has not been represented as human editorial review. Keep the route noindex until CalculatorGeek records a completed YMYL editorial review.