How was the health plan study run?

10,000 plan pairs drawn with a fixed seed of 20261026: low-premium plans at $150 to $300 a month with deductibles of $2,500 to $5,000, high-premium plans $100 to $250 a month more with deductibles of $500 to $1,500, both at 20% coinsurance, priced by the calculator's own engine.

What did the study find?

The low-premium plan wins 74.4% of scenarios by a median of $1,494.99; the high-premium plan wins 25.6% by a median of $626.59. A break-even exists for 92.0% of pairs, median $4,000 in billed charges. The high-premium plan holds the better worst case in 88.1% of pairs.

Does the study include HSA tax savings?

No. HSA tax savings and employer HSA contributions are excluded, exactly as the calculator excludes them. Including them would favor the low-premium plan further, so 74.4% understates the cheap plan's advantage for households that fund an HSA.

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The coverage ledger · Table No. 38

Health Plan Break-Even Study

We ran 10,000 plan pairs through the calculator engine to answer one question: how often is the cheap plan actually cheaper? The cheap plan wins 74.4% of the time, and loses the worst year.

Filed October 26, 2026 · figures checked against 2026 sources

What we ran, and why

Every open enrollment, households ask the same question: is the cheap plan actually cheaper, or does it just look cheaper until someone gets sick? This study answers it with volume instead of anecdotes. We ran 10,000 plan pairs through the same cost engine that powers the Health Insurance Cost Calculator on this site, and counted how often the low-premium plan wins, by how much, and at what bill level the winner flips. The method is fully stated below so any reader can reproduce it or challenge it.

The study matters because the single worked example on the calculator page, however honest, describes one pair of plans. Real enrollment offers thousands of pairs, and the distribution of outcomes across those pairs is more useful than any single pair. A household that knows the cheap plan wins three quarters of the time, and knows the shape of the quarter where it loses, can decide with the odds stated instead of a feeling.

Methodology, stated plainly

Each scenario draws a low-premium plan and a high-premium plan. The low-premium plan's monthly premium is drawn uniformly from $150 to $300, its deductible from $2,500 to $5,000, and its out-of-pocket maximum from $6,000 to $9,000. The high-premium plan's monthly premium is the low plan's premium plus $100 to $250, its deductible is drawn from $500 to $1,500, and its out-of-pocket maximum from $3,000 to $5,000. Both plans use 20% coinsurance, so the comparison isolates the premium, deductible, and maximum trade rather than mixing in coinsurance differences. Billed charges for the household are drawn from a mixture that mirrors real spending: 40% of scenarios bill $0 to $1,500, 40% bill $1,500 to $6,000, and 20% bill $6,000 to $25,000.

Total yearly cost for each plan is computed exactly as the calculator computes it: twelve months of premiums plus out-of-pocket costs, where out-of-pocket costs equal billed charges up to the deductible, then 20% of charges above the deductible, capped at the out-of-pocket maximum. The break-even bill amount for each pair is found by scanning billed charges from $0 to $40,000 for the first point where the low-premium plan stops winning. The random seed is fixed at 20261026, so the results are reproducible: rerun the same draws and the same figures come out. Copays, out-of-network charges, prescription tiers, HSA tax savings, and employer HSA contributions are excluded, exactly as the calculator excludes them, so the study inherits the calculator's stated limits.

The headline result: the cheap plan wins 74.4% of the time

Across 10,000 scenarios, the low-premium plan costs less in 74.4% of cases, and the high-premium plan costs less in 25.6%. There are no ties at the precision measured. That is a strong result, but it needs its shape, not just its headline. When the low-premium plan wins, it wins by a median of $1,494.99, with a mean saving of $1,479.34. When the high-premium plan wins, it wins by a median of $626.59, with a mean saving of $772.17. The cheap plan's wins are roughly twice as large as its losses, which is why the expected value favors it even more than the win rate suggests: the average household in this distribution saves more by picking cheap and being right than it loses by picking cheap and being wrong.

Why does the cheap plan win so often? Because the bill distribution is skewed toward low spending. Most households in most years bill little, and in low-bill years the premium gap dominates: the household pays the premium difference in full and pays little out of pocket on either plan. The high-premium plan's advantage only appears once bills pass the break-even, and most drawn bill levels sit below it. The 20% of scenarios in the heavy band, $6,000 to $25,000, are where the high-premium plan does most of its winning, but they are a minority of years for a typical household, even though they dominate household anxiety.

The break-even distribution: median $4,000

A break-even bill amount exists for 92.0% of plan pairs: in those pairs, there is a bill level below which the cheap plan wins and above which the rich plan wins. The median break-even across those pairs is $4,000 in billed charges. In the remaining 8.0% of pairs, one plan wins at every bill level, usually because the premium gap is so large, or the out-of-pocket advantage so small, that the gap never closes or never opens. The practical reading is straightforward: if your household's plausible bill level sits well below $4,000, the cheap plan is the favorite; if it sits well above $4,000, the rich plan is the favorite; and if it sits near $4,000, the choice is close enough that the HSA, the network, and the worst case should decide it.

The worst case tells a different story from the typical case, and households should hear both. In 88.1% of pairs, the high-premium plan has the better worst case: when both plans hit their out-of-pocket maximums, the rich plan's lower maximum more than offsets its higher premiums. The cheap plan wins the typical year and loses the catastrophic year, in most pairs. That asymmetry is the real decision: the cheap plan is the better bet on average, and the rich plan is the better insurance against the year that breaks a budget. A household with a deep emergency fund can take the bet. A household without one may rationally pay for the insurance.

The boxed insight. The cheap plan wins 74.4% of scenarios and by a median of $1,494.99, while the rich plan wins 25.6% by a median of only $626.59, yet the rich plan holds the better worst case in 88.1% of pairs. The cheap plan is the better bet and the worse insurance, at the same time. Households should pick the cheap plan when they can absorb the catastrophic year, and the rich plan when they cannot, and that sentence, not the premium, is the decision.

What the study does not prove

Three limits deserve emphasis. First, the study excludes HSA tax savings and employer HSA contributions, which favor the low-premium plan, so the true cheap-plan win rate with the HSA counted is higher than 74.4%, not lower. Second, the study uses uniform draws, not real plan distributions: real employer menus cluster differently, and a household comparing two specific plans should run those two plans, not the distribution. Third, the study prices cost only. Networks, drug formularies, and provider access are invisible to it, and a plan that wins on cost and excludes your doctor has not won. The study is a base rate, not a prescription: it tells you what usually happens, and your two plans tell you what happens to you.

The honest summary is this. Run your own two plans through the calculator, read your own break-even, and compare it to the study's median of $4,000. If your break-even sits far above your plausible bills, take the cheap plan and fund the HSA. If it sits far below, take the rich plan. If it sits near your plausible bills, let the worst case and the network decide. Ten thousand scenarios cannot enroll you. They can only tell you the odds, and the odds say the cheap plan wins most years, loses the worst year, and rewards the household that can tell the difference.

Study questions

How was the health plan study run?: 10,000 plan pairs drawn with a fixed seed of 20261026: low-premium plans at $150 to $300 a month with deductibles of $2,500 to $5,000, high-premium plans $100 to $250 a month more with deductibles of $500 to $1,500, both at 20% coinsurance, priced by the calculator's own engine.
What did the study find?: The low-premium plan wins 74.4% of scenarios by a median of $1,494.99; the high-premium plan wins 25.6% by a median of $626.59. A break-even exists for 92.0% of pairs, median $4,000 in billed charges. The high-premium plan holds the better worst case in 88.1% of pairs.
Does the study include HSA tax savings?: No. HSA tax savings and employer HSA contributions are excluded, exactly as the calculator excludes them. Including them would favor the low-premium plan further, so 74.4% understates the cheap plan's advantage for households that fund an HSA.