Choosing health insurance in Germany can be a mine field. Whether to select private health insurance or public health insurance is the first hurdle. There’s a lot of information out there which can be misleading. We speak to hundreds of expat clients each week as German health insurance brokers and we’re always left amused by some of the assumptions people make about German private health insurance.
Isn’t private health insurance more expensive? Surely private health insurance provides higher quality care? These are some of the assumptions we hear all the time. But, we’re here to tell you that all those assumptions and many more are actually completely untrue.
We’re here to demystify everything you thought you knew about German private health insurance and provide you with the facts. The facts that you need to know in order to be informed about selecting the right health insurance for you whilst living in Germany.
MYTH #1: Private health insurance in Germany is always better than statutory public health insurance
False. It’s easy to assume that anything that is state run is going to be of lesser quality than something that is privately funded. But, in Germany, this is certainly not the case. Germany is renowned for having a world-class public health system that provides a high quality of care to its citizens. Both in terms of benefits and facilities. There are indeed, many benefits to choosing private health insurance, such as shorter appointment waiting times. However, whether this type of insurance is best suited to you, is completely dependent on your personal situation. If you’ve picked a cheap or very basic private health insurance plan, your benefits compared to what you may have received on the public health scheme may be very restricted.
MYTH #2: German private health insurance is cheaper and better for anyone whose annual income exceeds the statutory health insurance limit
Wrong. A private health provider is not favourable just because your income exceeds the statutory health insurance threshold. It’s important to look at your personal circumstance and determine what the final cost of your premiums would be in total. You should also compare both the private health insurance and the public health insurance scheme. Things like your age and the number of dependents you have come into play. For instance, if you have more than two children, German private health insurance is very expensive. This is because each person in your family is treated separately with independent premiums when you have private health insurance. If this is the case for you, public health insurance may be cheaper and a better option. In this situation it might be more beneficial to buy supplementary private health insurance.
MYTH #3: Once you have private health insurance you can never go back to the public scheme
Not necessarily. In most instances it is difficult to join the public health scheme if you’ve initially opted to be privately insured . But it’s not impossible. There are exceptions to this rule that often force people to move from the private health insurance scheme to the public health system.
For example, you cannot change to the public health system if you’re self-employed and choose to stay self-employed. If you decide to cease self-employment status however, and you earn less than the compulsory insurance threshold as an employee, it is mandatory for you to join the public scheme. Similarly, receiving unemployment compensation (Arbeitslosengeld I) from the German Agency of Labour makes you a mandatory member of the public health scheme. So if you are an employed person enjoying private health insurance, but then your job is terminated or you are made redundant from your role, receiving unemployment compensation – even if it is only for a few days – changes your status and you will be madatorily insured in the statutory scheme if you want or not. The above exemptions do not apply to those 55 or older, however. It’s near impossible for you to move from a private health insurance plan to the public system once you’ve hit this age.
MYTH #4: Being privately insured means more paperwork
No, it does not. Many believe that having private health insurance in Germany means that making a claim is a painful and lengthy process. This is simply not the case with most private health insurance providers being on their way to being completely digitised these days. To make a claim for medical treatments, prescriptions or consultations, often all you need to do is upload your invoice or receipt via your insurer’s mobile app. Most doctors provide you with an invoice at your visit with 30-day payment terms. You are usually swiftly refunded your money via your bank account once you’ve uploaded a photo of your documents to the designated app.
MYTH #5: German private health insurance contributions increase much more than in the public scheme
Not true. Again, this is completely unfounded and is totally dependent on your unique situation. When it comes to your health insurance, always look at the details! Premiums for health insurance are likely to increase on average between 3-5% each year. However, this is true for both the private and public health scheme, particularly if you’re a high earner.
Let us explain this in detail. Privately insured persons usually get a letter in November or December which announces the next increase for the following year. You can’t ignore it or overlook it. It’s not ideal (nor fair), but it’s something we have to live with.
Voluntarily insured employees who have public health insurance do not get such a letter every year. This gives those people the impression that they are not affected by the price increase. Meanwhile, their privately insured colleagues moan about premium increases. But this is a misconception. Those earning more than €62,550 gross per calendar year (that´s the number for 2020) who stayed voluntarily in the public health insurance scheme, end up paying the maximum amount of public health insurance. That’s known, okay. But what they often do not realize is that this maximum possible contribution is linked to the contribution Assessment Ceiling and this is increased by law every year.
Got it? So high earners insured in the public scheme also experience increasing contributions. But for employees, it is can be hidden in all the confusing numbers and tax-deductions on payslips. It’s not as obvious as a clear letter from a private health insurance company.
MYTH #6: If I become severely ill or injured, my contributions will increase
FALSE. Your private health insurance contributions are fixed at the time you apply and sign your contract. Your contributions may increase over time but this is largely related to inflation rates. It can also be impacted by advances in medical technology, innovation and growing life expectancy. It in no way is related to you and your changing individual health requirements. Your private health insurance provider absorbs the risk of whether you fall ill or not when you sign your contract. That is how insurance works!
Have you been misled by any of the above misconceptions yourself?
Have you been misled by any of the above misconceptions yourself? Maybe you avoided private health insurance because you believed one of the above applied to you? Whatever the case, let us know in the comments below. Alternatively, get in touch with us directly if you’re deciding whether private health insurance is right for you. Stay tuned for Part 2 of this blog post too. We’ll be answering more of your questions and further myth busting everything you thought you knew about German private health insurance.