HSA vs. PPO: Which Is Better?

Decide whether an HSA or a PPO is a better fit for your healthcare needs.

By Robin Hartill, CFP – Updated Dec 2, 2025 at 5:11 PM EST

Key Points

HSAs offer triple tax advantages and investment options for medical expenses but require high deductibles.
PPO plans provide lower out-of-pocket costs and easier specialist access but have higher premiums.
Choose an HSA for low healthcare usage and savings potential; opt for PPO if facing frequent or high medical costs.

If you're choosing a health insurance plan, you may be weighing a health savings account (HSA) versus a preferred provider organization (PPO) plan. An HSA can help you save money for medical expenses, while a PPO plan gives you access to a network of healthcare providers.

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An infographic comparing the similarities and differences between HSA and PPO plans. — Image source: The Motley Fool

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HSAs and PPO plans serve distinct purposes. Here is a summary of their respective benefits and drawbacks:

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Table by author.

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Source: Healthcare.gov.

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Many employers that offer high-deductible health plans also offer HSAs. If your employer doesn't offer an HSA with its high-deductible plan, then you can still open one independently.

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Although the option of opening an HSA is attractive to many people, choosing a PPO plan may be the best option if you have significant medical expenses. Not facing high deductible payments makes it easier to receive the medical treatment you need, and your healthcare costs are more predictable.

Unlike HSAs, PPO plans are not investment accounts. They also generally do not cover over-the-counter medications, dental, or vision care.

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The bottom line

A PPO is a type of health insurance plan, while an HSA is an account you use to save and invest money for healthcare. An HSA can be a smart way to save for health-related costs. The money stays with you and can help you pay for future medical expenses if you don't need the money in a given year. But since it requires a high-deductible health plan, it's not a great option for those with chronic health issues. For those whose medical expenses are high, a PPO is typically the better option because it comes with lower out-of-pocket costs.

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HSA vs. PPO plans FAQ

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About the Author

Robin Hartill, CFP, is a contributing writer at The Motley Fool. Robin’s work has also been published by Yahoo Finance, USA Today, and Penny Hoarder. She is a graduate of the University of Florida.

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