When does this Increase in Contributions occur?
In most cases, an increase in premiums occurs in January, being accounced in November. However, there is an exception of 2 or 3 insurance companies where the increase takes place in spring. You will receive a letter about adjustments to your health insurance premium if you’re privately insured. This polite wording – in German: “Beitragsanpassung” – usually means that your monthly contributions will increase the following year. This may come as a shock to some and may seem a little unfair. But the reality is, the health insurance premiums increase is something that happens regularly. This is regardless of your insurer, your specific insurance agreement or whether you are publicly or privately insured.
Why didn’t I know about the increase?
It’s not included in the terms you sign with your provider. However, historical information on past increases and a disclaimer on potential future increases accompanies the quotes provided to you by a health insurance company.
Despite this, it’s often a detail easily missed in the fine print. Or unfortunately, not emphasised by agents and brokers who may not be as thorough.
Does this situation sound familiar?
Did the increase came as a surprise to you?
We encourage you to get in touch with your health insurance broker to talk through your options.
If you don’t have a broker, you’re also welcome to get in touch with us at KLforExpats for free advice.
Other facts to keep in mind:
- Your employer will pay half of the health insurance premiums increase. This is as long as the contributions do not reach the highest amount that your employer subsidises.
- The contributions for both public and private health insurance are deductible from tax.
- An increase in health insurance premiums is separate to obligatory nurse care insurance (in German: Pflegepflichtversicherung = PVN) increases. Health insurance providers need to enforce this by law.
- Although health insurance premiums increase by an average of 3 – 5 % each year, there are some instances where this can be much higher. For example, an insurance company may only see an increase in 2 % one year and 9 % the second year. And therefore, does not reach the 10% threshold. Customers who experienced no increase for two years will get hit with a bigger increase in the third year when the threshold is reached. These are the cases where those jumpy climbs might make you lose your temper. Luckily, most insurance companies will factor this in and charge a gradual increase so consumers aren’t blind sighted by such high increases.
1. You can cancel your health insurance agreement and switch to another insurance company
Whilst this may look favourable, you should consider the following:
Applying to switch health insurance providers will mean that you have to complete another health assessment. Therefore, if you now have a pre-existing health condition that you didn’t have when you signed up for health insurance with your current provider, you may incur a significant surcharge.
Your age heavily impacts your premiums. Switching to a new provider means that your current age will be taken into consideration. This could be significantly higher if you’ve been with your current provider for quite some time.
2. You could stay with the same provider but change your plan and level of coverage
It may be a good idea to contact your health insurance provider directly or speak to your agent or insurance broker to see if this option makes sense for you. According to § 204 of the German Insurance Contract Act (Versicherungsvertragsgesetz), it is possible to switch to other tariffs of the insurer with similar insurance cover. Just remember, the plan you end up switching to could be subject to high premium increases next year. Therefore, please make sure to check the offer to see when this plan was last increased. If that was more than 3 years ago, you know, the next increase will be violent. And then you have won nothing.
3. Stick to what you have and ride out the increase
In most cases, this can be your most favourable option. As we explained, yearly increases of your health insurance premiums are normal and will affect everyone who is publicly or privately insured at some point.
We’d also like to emphasise that the decision to take out private health insurance isn’t a decision one should make lightly. It’s a decision for life and one that should be well-thought through and not steered by bagging the best bargain. Act wisely and know the full scope of what you’re buying into. The type of health insurance you choose could significantly impact the course of your life.
Still concerned about the level that your premiums have increased this year?
Not sure about how you should respond?
We highly recommend contacting your health insurance broker to discuss your options.
If you don’t have an agent or broker who advises and accompanies you independently and friendly, We offer neutral, free advice and will be able to help you understand whether the increase you’re facing is normal in the context of the current market and what options you can explore if it’s not!