The private health insurance network in Germany comprises 42 companies, all of which provide comprehensive health insurance to their members. Broadly speaking, there are two categories of private health insurer:
- Joint-stock companies (Aktiengesellschaft—AG): This type of company is owned solely by its shareholders. Any profits are distributed to shareholders. Policyholders do not directly have a share of the company’s profits.
- Mutual insurance company (Versicherungsverein auf Gegenseitigkeit, VVaG): These companies are owned entirely by their members, and any profits are redistributed among the members. The purpose of these companies is to serve the interest of the policyholders.
Who qualifies for private insurance?
Not everyone in Germany is allowed to have private insurance. Eligibility depends on a few factors, including income and line of work. You are eligible to join the private health insurance system if:
- You are a freelancer or self-employed; or
- You are employed by a German company and earn more than €64,350 a year (in 2021).
If you are eligible for private insurance, you must apply with your insurer of choice. The insurer will ask you questions about your medical history and may require you to have a medical exam by a doctor.
Unlike the public Krankenkassen, private insurers are allowed to discriminate based on pre-existing conditions. When you apply for private health insurance, you’ll need to fill out a medical history form. This includes medical treatments you’ve received in recent years (usually in the last three to seven years, depending on the company). You will need to let the insurance company know about any chronic conditions, as well as surgeries, in-patient hospital stays, and mental health care, among other treatments.
Based on your answers, the insurance company will determine your eligibility. If your condition is severe, the insurance provider may add a surcharge to your monthly premium because you are considered “high-risk”. Since covering ongoing treatments for certain conditions may be quite expensive, the risk surcharge keeps costs down for other customers. If the insurance provider determines that your health situation makes you too risky to take on, they can also choose to reject your application.
In some cases, a risk surcharge can be removed if the insured party can show that the condition hasn’t required costly treatments over a significant period of time. For example, risk surcharges often apply to obese patients because they are at significantly greater risk for developing chronic conditions like heart disease and diabetes. But if a patient loses weight and remains in a healthy weight range for several years, then the surcharge can be removed—those risks have been significantly reduced and the surcharge can no longer be justified.
Rarely, the insurer may choose to accept you, but exclude treatment related to a particular pre-existing condition. Generally, though, previous treatments or chronic conditions will not result in all-out rejection or treatment exclusions.
Costs for private health insurance are based on health status at the time of joining. The main factors that influence monthly premiums are preexisting conditions and age. So if you join private insurance when you’re relatively young and healthy, then your monthly costs could actually be lower than with public health insurance, which determines monthly costs based on income alone.
If you’re a full-time employee and qualify to join private health insurance, your employer will cover half of your monthly premium—just like they would if you were a member of a public Krankenkasse.
Do costs go up over time?
Many customers ask whether private health insurance gets more expensive over time. The short answer is “yes”—but so do public contributions. Both private and public insurers are bound by German law when it comes to raising monthly premium costs. They may only raise costs if they can show that the cost of services—e.g. covering medical equipment or operations costs—have gone up enough to warrant an increase. Between 2010 and 2020, average contributions per person for private insurance have increased by 2.3%, while the increase for public insurance has gone up by 3.8% per person. So these types of cost increases are just a fact of life in the German insurance landscape, whether you choose public or private.
“Will the costs go up a lot when I’m old?” is another question we hear from customers often. It’s true that if you join a private insurance company when you’re older, you’ll probably pay high premiums. But the earlier you enter the private system, the more affordable your payments will be in old age. This is due to Alterungsrückstellungen (ageing reserves), an important mechanism that private insurers have in place to keep premiums consistent.
So how does it work? Let’s say you’re in your late 20s and relatively healthy. The monthly premium you’re paying now is intended to stay the same over the decades to come—so you should be paying around the same amount when you’re 80 years old (with some adjustments for rising overall health systems costs and inflation).
Since you have no major health problems, your current health costs are relatively low, and a significant portion of your monthly premium goes into the reserves. But as you get older and require more expensive care, your monthly premium stays consistent—the additional costs are covered by the money you and other members have put away over time.
Family & dependents
If you’re moving to Germany with a family, you will want to carefully consider insurance options for all of your family members. And even if you qualify for private insurance, it may not be the best option if you have a family.
Unlike with public health insurance, which covers dependents at no additional cost, you will have to buy a separate insurance policy for each of your family members if you choose private. This makes private insurance prohibitively expensive for many people with families.
Can I switch from private back to public?
If you switch to private insurance, it can be difficult to get back into the public insurance infrastructure—but it’s not impossible. Generally speaking, you’ll need to fulfill two criteria to make the switch from private back to public:
- Be under 55 years old: There is no way to enter the public system if you’re 55 or older.
- Earn less than the private health insurance threshold: Just as you need to fulfill certain income requirements to join private insurance, you’ll also need to meet certain criteria to rejoin public—just the other way around. By the 2020 rules, this means you’ll need to get a full-time job paying less than €64,350 annually in order to re-enter the public system. Of course, this also means that you’ll be earning less than you did when you joined private insurance. So if you’re willing to take a pay cut, you’ll be able to enter the public system.
if you’re a freelancer, you’ll have to seek out full-time employment in order to make the switch. You cannot choose to switch to public if you’re still freelancing.