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Our guide to private health insurance

Forty-two companies provide private health insurance in Germany. They all provide comprehensive health insurance to their members and are regulated by the government, so there is no need to worry about their legitimacy.

There are two basic categories of private health insurance: 

  • Joint-stock companies (Aktiengesellschaft — AG)
    • This is a type of company that is owned solely by its shareholders. Any profits made by the company are distributed to the shareholders. Policyholders do not receive a share of the company’s profits. 
  • Mutual insurance company (Versicherungsverein auf Gegenseitigkeit, VVaG)
    • This type of company is owned by its members, and any profits made at the end of a financial period are redistributed among the members. The purpose of this type of insurance company is to serve the interest of the policyholders. 

While many are interested in getting private insurance in Germany, not everyone can be on a private health insurance plan. Eligibility depends on a few factors, including income and what type of work you do. 

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).

Did you know that Feather has the quickest private signup in Germany? If you don’t have preexisting conditions, you can get private insurance without a doctor’s visit.
How do I know when I’m eligible for private health insurance? 
  • I’m a freelancer or self-employed
  • My annual income is more than €64,350 (2021 requirement)

Pre-existing conditions

Unlike public health insurance which accepts pre-existing conditions, private health insurance does, in fact, discriminate based on your health. They do this by asking in the application for a medical history form. Depending on the provider, this includes any treatments you’ve received within the past 3 to 7 years. You will also need to let the company you’re applying to know about any chronic conditions, surgeries, inpatient hospital stays, and overall mental wellbeing (among other questions regarding your health).

Based on your answers, the insurance company will determine your eligibility. If you have any severe conditions, the private health insurer may add an additional surcharge to your monthly premium after classifying you as “high-risk.” Private health insurers do this since covering ongoing treatments for certain conditions is sometimes quite expensive. The additional surcharge keeps costs down for other customers. 

People with pre-existing conditions are sometimes too risky to take as customers, so private health insurance companies reject these applications. 

Suppose the pre-existing condition has been fully treated. The insured person can provide proof the condition will no longer require costly treatments over a significant period of time. In that case, the insurance company can remove the additional surcharge. For example, risk surcharges often apply to patients with obesity because they are at greater risk for developing chronic conditions like heart disease and diabetes. But, if a patient loses weight and remains at this weight over a period of time, they can apply to have the surcharge removed. 

In rare cases, the private health insurance company may accept someone with pre-existing conditions but exclude treatment for it. In our experience, helping people get private health insurance, previous treatments, and chronic conditions won’t result in an all-out rejection. Most companies would rather add a surcharge than reject someone. 

Costs

The cost of private health insurance is calculated based on your health status at the time of joining. The main reason why private health insurance can be so costly is dependent on age and pre-existing conditions. If you join private health insurance when you’re young and healthy, the monthly costs are quite often lower than income-based payments. 

Employer coverage

If you’re a full-time employee and qualify for private health insurance, your employer will cover half of your monthly premium — just like they would if you had public insurance. 

Do costs go up over time?

Yes, private health insurance costs will get more expensive over time, but at similar rates to public health insurance. Under German law, public and private insurance providers can only raise expenses if they show that the cost of healthcare has gone up. 

Between 2010 and 2020, the average cost of the contribution per person for private health insurance has increased by 2.3%, while public health insurance has risen by 3.8%. So, whether you choose private or public health insurance, you can expect the cost to increase over time. 

Will the cost of health insurance increase with age?

While it is true that if you join private health insurance when you’re older, you’ll most likely pay a high premium. But, the earlier you enter the private health insurance system, the more affordable your payments will be when you’re older. This is due to Alterungsrückstellungen, or Ageing Provisions, an important strategy that private health insurance uses to keep premiums consistent. 

So, how would the system work for someone in their late 20s who is relatively healthy? The monthly premium is intended to be fairly consistent over several decades, increasing due to proven increases in healthcare costs. So you should be paying a similar amount when you’re 80 as you would pay in your late 20s. 

Let’s assume that the person applying has no major health problems. The current premium cost would be relatively low. A significant portion of your monthly premium would go into these aging provisions for the future. This keeps monthly fees consistent although you use your insurance plan more often. 

Family & dependents

If you’re not single, young, and healthy, it might be a good idea to consider public health insurance. Under private health insurance, you would have to add each family member, which can get a little expensive. Public health insurance covers dependents at no additional cost. 

Learn more about public health insurance

Can I switch from private back to public?

This is a fear many have when switching to private insurance. Generally, it’s possible, but only if you fulfill two requirements: 

  • You’re under the age of 55
  • You earn less than a certain amount (in 2021, that’s €64,350)

If you’re a freelancer, you’ll have to seek out full-time employment to make the switch to public health insurance. You cannot choose to switch to public insurance if you’re still freelancing.

You can read more about it in our blog post.