Private or public? An introduction health insurance in Germany

Private or public? An introduction health insurance in Germany

German health insurance seems expensive and complicated, but in this guide, we explain how to find the best insurance for your needs.

Health insurance in Germany is not free, but it's mandatory. If you stay in Germany for more than 90 days, you must have health insurance1. In this guide, we will explain how public public health insurance (gesetzliche Krankenversicherung) and private health insurance (private Krankenversicherung) work, and which one is better for you.

This guide was written with the help of Rob from Popsure. Rob kindly answered many of my questions with refreshing honesty.

Know your options

Your insurance options depend on your income and your job status. Most people can only choose public health insurance.

  • Compulsorily insured (Pflichtversichert)
    If you are an employee, and you make less than 60 750€ per yearin 2019, you are compulsorily insured (Pflichtversichert). You must choose public health insurance.
  • Voluntarily insured (freiwillig versichert)
    If you are not an employee, if you have a minijob or if you make more than 60 750€ per yearin 2019, you are voluntarily insured (freiwillig versichert). You can choose private or public health insurance. Don't let the name fool you; you still need insurance!

Those people are voluntarily insured12:

  • Students
  • Freelancers
  • Doctors
  • Civil servants
  • People with a single minijob1

Public health insurance

Around 90% of German residents have public health insurance (gesetzliche Krankenversicherung or GKV)1, 2. There are multiple public health insurers (Krankenkassen) to choose from.

Cost of public health insurance

The cost of public health insurance depends on your income. The contributions cost 14.6 to 15.6% of your income1. The more money you make, the more expensive it gets. If you make more than 54 450€ per yearin 2019, the cost of contributions stops going up.

  • If you are an employee, you pay 7.3 to 8.3% of your income, and your employer pays the rest1.
    • If you make more than 54 450€ per yearin 2019, you will pay around 400€ per month1. Even if your salary goes up, you won't pay more than that1. This is the maximum contribution (Höchstbeitrag). This amount changes every year. 
    • If you are unemployed or make less than 12 460€ per year1, you will pay around 150€ per month1. This is the minimum contribution (Mindestbeitrag). This amount changes every year. If your spouse or your parents have public health insurance, you can use their insurance for free.
    • If you are a student under 30 years old, you will pay even less: around 90€ per month1, 2, 3.
    • If you have a minijob, you still need health insurance. If your spouse or your parents have public health insurance, you can use their insurance for free1. If not, it should cost around 150€ per month. Use this calculator to estimate the cost.
  • If you are a freelancer, you pay 14.6 to 15.6% of your income1.

Useful links:

Benefits of public health insurance

  • It's cheaper when you're old
    Since public health insurance is based on your income, it will be much cheaper than private insurance when you get older. Once you retire, your insurance will become very cheap, since your salary will go down. If you are over 45 years old, public insurance is almost always the best option.
  • It covers your dependents for free 
    If you have children, they are covered by your insurance. If your spouse is unemployed, (s)he is also covered by your insurance. If your spouse only has a minijob, (s)he is covered by your insurance1. If you plan to have children, public health insurance is a better choice1.
  • It matches your income
    Public health insurance is cheaper when you make less money. If you lose your job or retire, public insurance will remain affordable. Private insurance will get more and more expensive, even if you become unemployed.
  • It requires less paperwork
    Public health insurance is simple. The doctors and the insurance companies talk directly to each other, so there is less paperwork to do. The price won't change as you get older. When you go to the doctor, you just show your insurance card and you're done. You don't need to worry about price changes, coverage, refunds or deductibles. Private health insurance requires more paperwork.

Disadvantages of public health insurance

  • It's expensive for young professionals
    Public insurance is based on your income, and private insurance is based on your health. If you are young, healthy and have a good income, public will be much more expensive than private.
  • You don't get the best treatment
    It's usually easier to get a quick appointment with private insurance. With private insurance, doctors always have time to see you1. For example, it's very difficult to find a psychotherapist who accepts public health insurance1, 2.
  • Special treatments are not included
    If you want special treatments, you will need to pay the extra cost yourself. When I had my wisdom teeth removed, my insurance only paid for local anaesthesia. General anaesthesia was more expensive, so I had to pay the difference myself. Private insurance lets you choose the quality of your coverage.
  • It's not available for everyone
    If you are a freelancer who just moved to Germany, it's really heard to get public health insurance. Public insurance companies are not forced to cover freelancers1. Many freelancers are forced to choose private health insurance companies because of this.

Which public health insurance should I choose?

When I asked Rob this question, he immediately said "as an expat, Techniker Krankenkasse is a no-brainer, by a long way." TK is very popular among expats, because it offers support in English. I have been with TK since I moved to Germany, and I am very satisfied.

AOK is another popular option. There are a hundred more options, but public health insurance companies (Krankenkassen) have very similar prices and coverage1. The biggest difference between companies is customer service.

Private health insurance

Around 10% of German residents have private health insurance1. You can only have private insurance if you are voluntarily insured (freiwillig versichert).

Cost of private health insurance

The cost of private health insurance (private Krankenversicherung or PKV) depends on your age and your health. The older you get, the more expensive it gets. It will be cheaper than public health insurance when you are young, but much more expensive when you get old.

  • It's cheap when you are young
    A healthy 25 years old man could pay as little as 175€ per month (350€ for freelancers) for private insurance. If you make a good salary, this is much cheaper than public insurance.
  • It's very expensive when you are old
    When you get old, you could pay 1500€ per month for the same insurance! This is a lot of money if you are retired. Your income goes down, but your insurance keeps getting more expensive1. This can easily bankrupt you12. If you are over 45 years old, private insurance is rarely worth it. After 55 years old, it's almost impossible to go back to public health insurance.
  • It's expensive if you have health problems
    You must take a health test before you get private health insurance. If you have any health issues that need constant treatment, your insurance will be much more expensive. If you have pre-existing conditions, they will often refuse to cover you1. This includes chronic diseases, psychotherapy or expensive medication, for example.
  • You choose what you need
    You can choose dental coverage, travel insurance, special treatment etc. If you choose more options, your insurance will be more expensive. If you choose fewer options, it can be very cheap.
  • You pay less with a higher deductible
    For example, if you have a 3000€/year deductible, you pay the first 3000€ in medical fees yourself, and your insurance pays everything after that. When you have a high deductible, you pay less in insurance every month. If you never go to the doctor, that's a good way to save money.

Who can have private health insurance?

Private health insurance is only an option if you are voluntarily insured (freiwillig versichert).

  • If you are a freelancer, you can always choose private insurance. There is no minimum income.
  • If you are an employee and earn more than 60 750€ per year (in 2019, before taxes), you can choose private health insurance.
  • If you are an employee and earn less than 60 750€ per year (in 2019), you can't be privately insured. You must have public health insurance. You can't choose private health insurance.
  • If you are a student, a doctor or a civil servant, you can choose private health insurance.

Which private health insurance should I choose?

The difference between private health insurance companies is much bigger than for public ones. They offer much more options, and the best option depends on your situation.

In Rob's experience, Allianz is a very well organised internally. This means that they handle claims efficiently, and that they can offer slightly lower prices. He added that some insurance companies offer some special deals for certain professions. HanseMerkur is popular among expat freelancers.

International and travel health insurance

International and travel health insurance is a very popular option for expats. It's sometimes the only insurance you can get when you just moved to Germany. Immigrants often use aLC, Mawista or Care Concept to get their visa, and switch to a real German health insurance as soon as possible. The Ausländerbehörde in Berlin unofficially accepts this sort of insurance for your first visa application1.

The problem with international health insurance is the limited coverage. Doctors don't always recognise these companies, so you will have to pay with your own money, and ask for a refund.

Usually, international health insurance does not include Pflegepflichtversicherung. This means they don't meet the German health insurance requirements1. You can't use it as your permanent health insurance.

Insurance brokers

Insurance brokers can help you pick the best health insurance, but you still need to do your research first.

Rob recommends to fully understand the difference between public and private insurance before you see a broker. Few brokers specialise in public and private health insurance. Many only sell private health insurance.

Always look for independent insurance brokers. Don't choose brokers who work for a single insurance company. They will recommend this company even when it's not the right one for you.

How do insurance brokers get paid?

When you sign a public health insurance contract, the broker will get a commission between 0 and 90€. When you sign a private health insurance contact, the broker's commission is around 9 times your monthly payment. This means they can make above 5000€ in commissions for private insurance. They also receive money every year for "holding" your contract.

Many brokers only sell private insurance, because it makes them much more money.

Switching from private to public health insurance

Switching private to public health insurance can be extremely hard, and sometimes impossible1. Public health insurance will often refuse to let you switch. If you are 55 years old or older, you can't switch to public insurance. It's almost impossible1

Otherwise, people would be on private health insurance when it's cheap, and switch to public health insurance when they get old. Public health insurance companies would go bankrupt!

One way to switch to from public to private insurance is to reduce your income. Once your income is below 60 750€in 2019, you are forced to use public health insurance. This does not work for freelancers.

Comments

  • Mikhail

    This is a good article, but it misses one critical aspect of private health insurance. The main thing is that PKV is financed by you and it has a savings effect. When you pay it being younger your insurance actually accumulates your contributions in their fonds and they will those money to sponsor the service when you're old and very much need it. The private insurance companies accrued already ridiculous amount of money. So they won't charge more and more the whole your life, it's a myth, after some age (let's say 70) the payment stabilizes and they can even start charge less, because hey, you have not so many years ahead anymore. So it won't be definitely 1500 euros per month. You'll pay this amount maybe if you started to contribute at 50 or later! I might be wrong in exact numbers, but you should get the principle.

    For the public insurance the picture is a bit different. Of course, it will get cheap when you're retired. But it's a distributive system. Your hefty medical bills will be sponsored by high-paying young and healthy workers. And the biggest issue with that is the ageing population. There will be more and more retired people and even less young workers. By now researchers predict, that in order to make those ends meet by 2050 the required contribution to the public insurance will rise from current 15% to 25-30%. Here you should ask yourself, what will happen if well-earning young workers of the future decide that those high contributions are not worth it and leave the public system en masse... Probably they will just start to cut coverage of public insurance (it happens already), or doctors become more and more reluctant to handle publicly insured patients (it happens already). Or maybe nothing happens! Maybe Germany will always be able to attract enough young skilled immigrants to pay increasingly high taxes. Who knows... I wouldn't be so sure saying that public health insurance is always the safest option, at least long-term. I myself is very concerned about it.

    Reply

    • Reply to Mikhail

  • Alejandro

    Nice, that this kind of infos is in english, but sorry, some points are wrong!
    If you loose your job then you will switch automatically to Pflichtversicherung, if you are younger 55. You mentioned the GKV is cheap, when you retire. Yeah, but how is the coverage. Hoy much of your own pocket do you have to pay in case you are sick?
    If you are in the PKV and lit save the delta to the GKV, you can finance the higher costs of your health insurance and deduct it from the taxes.
    By the way: if you get Grundsicherung im Alter abd you have a PKV, the government will pay for it. Then there are Rentertarife....

    Reply

    • Reply to Alejandro

    • Nicolas Bouliane

      Hi Alejandro,

      I asked Rob about your feedback, and it's not quite correct. You can only get back to Pflichtversicherung once your average income for the last 12 months goes below the 60 750€ limit (as of 2019). If you are a freelancer, you have to find a job that pays below 60 750€. It's far from easy.

      The coverage for GKV is set into law. The coverage for PKV is set by your insurance policy. Your calculation about PKV is correct as long as you make a high income your entire life. If you are a freelancer and your salary goes down for a few years, or if you decide to have children, PKV is a bit of a gamble.

      You are also correct about the government helping you if you absolutely can't pay for PKV yourself. However, you will still need to pay as much as you can, and that will affect your standard of living.

      In the end, it's a very personal decision that's affected by many variables. GKV is generally a safer choice, especially if you don't know what you are doing. Choosing PKV requires a lot more long-term planning.

      Reply

      • Reply to Nicolas Bouliane

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