How to Use your Health Insurance Deductible to your Advantage

There are a multitude of advantages when it comes to choosing private health insurance over statutory health insurance in Germany. One such benefit is your ability to tailor the quotes to your individual needs. Another is to opt for a health insurance deductible, excess or deduction fee that will lower your monthly premiums.

What is a health insurance deductible?

Typically when you receive a German health insurance quote you will find words like “Selbstbeteiligung” or “Selbstbehalt”. In English this commonly transfers to deductible, excess or co-payment.

Paying a higher level of excess means you agree to pay a certain amount each year for your treatments yourself. Choosing to apply a deductible to your private health insurance plan is a way to lower your monthly premiums. For example, a € 300 deductible (like in Plan Expert1+ from Barmenia or K300 from ARAG) would mean that it is up to you to pay the first € 300 of any treatments and medical expenses within the calendar year before your insurer steps in. Generally, the higher the excess or deductible, the more you can lower your monthly premium.

However, what seems to be a reasonable calculation for freelancers, can look quite different for employees. Employees receive a subsidy from their employer for their monthly health insurance contribution (in German: Arbeitgeberzuschuss). However, you must foot the deductible cost out of your own pocket in case of illness and medical expenses. Does that really make sense?

As with anything related to health insurance, it’s not always this black and white. You need to know how the deductibles for your insurance are structured.

Different health insurance providers have different terms when it comes to deductibles. As it can get a little complex, it’s important to take note of your own level of excess or deductible at the time you sign your insurance contract and be aware of how your deductibles will impact your claims. Since your terms will vary depending on your insurance provider, policy and own personal circumstances, it’s best to get in touch with your insurance provider or broker directly to discuss any questions you may have.

To illustrate how deductibles can vary from provider to provider, let’s take a look at the different forms of co-payment available from some of the top insurers.

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Mirja Link-Lundehn - Co-Founder of KLforExpats Mirja Link-Lundehn – Independent insurance broker

Co-founder of KLforExpats and licensed insurance expert

Did you know?

Deductibles are offered in absolute monetary figures as well as a set percentage. This depends on which insurance provider you choose. Some companies such as Ottonova, Allianz and AXA offer plans that calculate deductibles based on a percentage, rather than an absolute monetary amount. For example, when you’re a member of one of these policies, your insurance contract may stipulate that per claim, you have to pay 25% out of your own pocket. This means that for a €100 medical bill, you will get €75 reimbursed, with €25 being your deductible. Generally, these policies cover most forms of medical expenses; from prescriptions to hospitalisation.

There is also a third kind of deductible offered by some insurers that is only related to certain types of medical services. For instance, this could mean that your deductible may only apply to outpatient care, but not to dental services or hospital bills. AXA and Gothaer offer such plans whereby any dental treatment you submit as a claim, does not impact your level of deductibles. This is why it’s always important to weigh up your options carefully and read the fine print. If you know that you’re a healthy person with little chance you’ll need much medical care throughout the year, but you have bad teeth, then this kind of plan might be for you.

High quality plans offered by the likes of ARAG (e.g. plan MedBest) and Barmenia (e. g. Plan Expert+1) also offer a list of preventative benefits that are excluded from deductibles. Such preventative benefits include things like dental cleaning or cancer screenings and allow you to submit these claims without them impacting on your level of deductibles. Again, here’s where paying attention to the details will pay off (literally!) in the long run. Often the cheaper plans don’t offer the same conditions or level of flexibility that you might find in a higher quality plan.

What deductible option is best for you? Be clever!

There’s a range of factors to consider when it comes to selecting the right health insurance deductible option for you. Here are some of the most common scenarios that typically impact our clients. Knowing how your health insurance deductibles work and how you can use different providers to your advantage is key.

Deductibles for employees: Preferably no or only a small excess

Choosing a health insurance plan with a deductible is a great way to lower your monthly premiums. However, it may not always be the best financial option for you. For instance, if you are an employee, we’d usually recommend health insurance that doesn’t include a deductible or only a small one. This is because whilst your monthly insurance premium is half covered by your employer, the deductible is not subsidised in the same way.

Don´t forget to take advantage of the no-claims bonus: Weigh up carefully

ARAG provides a no-claims bonus if you don’t submit claims throughout the year. And this premium refund exceeds more than €2,000 in their plan MedBest. Not sure what no-claims bonus you are eligible for? Get in touch and we’ll do the maths for you. You could also decide to pay for your medical expenses out of your own pocket. At the end of the year, you could then assess whether your total expenses is lower than your no-claims bonus. Put it this way… Would you submit a claim for €1,000 worth of medical expenses if your provider offers a €2,000 bonus for submitting no claims? No, you probably wouldn’t!

Assess your health and age: in the long run the deductible will be exploited to the full

Knowing how your deductible works and taking advantage of the no-claims bonus is a clever way to save money. However, you should always be mindful of your own state of health. Generally, the older you get, the more you will have to engage in some form of healthcare. In this case, striving to go without medical care to get the no-claims bonus may not be realistic.

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