Compare Health Plans by Total Cost, Not Premium

The best health plan is the one with the lowest total cost in the year you actually have, not the one with the lowest premium. You can work that out in about fifteen minutes before your enrollment window closes.

Key takeaways

• Total yearly cost is your premiums plus what you pay for care, up to the out of pocket maximum.
• A lower premium usually means you pay more when you use care.
• Test each plan in three years: light, typical and heavy.

How do you compare health plans?

Add two things for each plan:

1. Premiums. Your share per paycheck times the number of paychecks in a year. Count only your share, not the employer's.
2. Care you pay for. You pay the deductible first. After that you pay a share of each bill, called coinsurance, until you hit the out of pocket maximum.

Once you reach the maximum, the plan pays 100% of covered in network care for the rest of the year. Premiums never count toward it. Out of network care does not count either.

For Marketplace plans, the 2027 limit is $12,000 for one person and $24,000 for a family (HealthCare.gov, checked October 2026). Employer plans work the same way, and most are held to the same ceiling. Read the actual figure on your plan summary.

A worked example

These numbers are made up. Use your own.

• Plan A, lower premium: $150 a month, $3,500 deductible, you pay 20% after that, $6,000 out of pocket maximum.
• Plan B, higher premium: $350 a month, $500 deductible, you pay 20% after that, $2,500 out of pocket maximum.

Yearly premiums are $1,800 for A and $4,200 for B. Now test three years:

1. Light year, $400 of care. A costs $2,200 and B costs $4,600. A wins by $2,400.
2. Typical year, $5,000 of care. Both cost $5,600. This is the break even.
3. Heavy year, $20,000 of care. A hits its maximum, so it costs $7,800. B costs $6,700. B wins by $1,100.

The $2,400 premium gap is the price of protection. Plan B only pays off if your care passes about $5,000.

Most plans cover certain preventive care in full before you meet the deductible, so a routine checkup usually does not count as care in this math.

Compare your own plans in 15 minutes

1. Get the four numbers. For each plan, find the premium per paycheck, the deductible, the coinsurance and the out of pocket maximum. They are on the plan's Summary of Benefits and Coverage.
2. Estimate your year. Open your insurer's portal and add up last year's claims. Then add anything known: a planned procedure, a pregnancy, ongoing prescriptions or therapy.
3. Run light, typical and heavy. Use the same three steps as the example, with your numbers.
4. Adjust for extras. Subtract any money your employer puts into an HSA. Check that your doctors are in network and your prescriptions are covered. Ask whether the deductible is per person or shared by the family.
5. Pick a maximum you could pay. Ask whether you could pay the plan's out of pocket maximum in one bad year. If not, lean toward the plan with the lower maximum, even if the premium is higher.

Your quick checklist

• [ ] Open the summary for every plan you can choose.
• [ ] Write down premium, deductible, coinsurance and out of pocket maximum.
• [ ] Add up last year's care from your insurer's portal.
• [ ] Run a light, typical and heavy year for each plan.
• [ ] Check doctors and prescriptions against each plan.
• [ ] Add your enrollment deadline to Nusafa.

Next step

Do the three year test on your two most likely plans tonight, then add your enrollment deadline to Nusafa so the window does not close on you. Related: the open enrollment checklist and HSA vs. FSA.

This is general information, not medical advice. It is general education, not personalized financial advice. Plan rules vary, so confirm the numbers with your insurer or HR team.