Public or private health insurance?
All facts summarized for you!
All residents of Germany must have health insurance. There are two kinds of health insurance – public, known as the gesetzliche Krankenversicherung, and private, known as private Krankenversicherung. In short, these two are referred to as “GKV” and “PKV.” There are advantages and disadvantages related to each, so you’ll have to do a little research to find out what makes the most sense for you and your situation. Read on for advice on how to select the right healthcare for you.
First, you should consider if you’d like to be insured publicly or privately. Not everyone is always eligible for private insurance, so before setting your heart on the PKV, you should find out whether you’re a good fit. There are a few questions to consider when deciding if you’d like to be insured by a private insurer or a public insurer.
The public health insurance system – also known as statutory health insurance or gesetzliche Krankenversicherung (GKV) in German – offers a basic, universal standard of healthcare to everyone resident in Germany.
If you are employed and your salary is under the annual pay threshold (Jahresarbeitsentgeltgrenze) of €64,350 per year (2021), you will automatically be registered for public health insurance. The higher your salary, the higher your premiums – but your coverage will remain unchanged.
There are downsides to the public system. For one, the scope of coverage is basically fixed. Although some public insurance providers (of which there were 109 in 2019) offer slightly different coverage, the treatments covered generally follow the minimum requirements of the German Social Code. Lawmakers can also amend this at any time, so your level of cover is not guaranteed to last forever.
The public system also covers fewer treatments, especially when it comes to dental care.
Private health insurance providers – of which there were 45 in 2019 – have far greater scope to tailor their coverage and offer premium treatments and services.
If you are in good health and have no family history of serious illness, or if you are simply looking for a more affordable option, you can choose a more basic level of coverage.
On the other hand, you can also choose a full-coverage policy to cover all eventualities. Such policies are naturally pricier but offer peace of mind, leaving you safe in the knowledge you have done everything possible to safeguard your health.
Plus, private health insurance coverage is guaranteed by contractual agreement: Your provider can never curtail or change this coverage.
ottonova offers a range of comprehensive health insurance policies tailored to different needs – including a special rate for expats.
Private health insurance in Germany
To enter the private insurance system, the German government decides on a minimum Jahresarbeitentgeltgrenze (JAEG) – an annual income threshold – . This is adjusted for inflation every year, which means you need to check the current JAEG before signing up for private insurance. If you earn less than this amount, you do not qualify for private insurance and must choose a public insurance provider.
If you are married to your partner or if your relationship is recognized as a domestic partnership, your provider can also cover your partner, as long as they do not earn income or earn below a certain threshold.
If you are self-employed, you are also eligible for private insurance.
In addition, there are special types of plans for different jobs or life situations. For example, most Beamte, or civil servants, are privately insured. As a result, most private insurance companies have a special rate just for them. Students also receive a discounted rate with most private plans or, if you’re self-employed, there might be a special price offered by private insurance providers. It’s important to understand what you’re eligible for before choosing private or public health insurance.
In the public insurance system, your monthly insurance contribution is based on your annual income. For those earning above the minimum threshold (JAEG), your insurance costs will be at the maximum rate possible. If you are single with no dependents, this isn’t the most financially advantageous choice.
On the other hand, the private system is designed to ensure that your monthly payments cover only your medical costs. Your monthly rates in the private system are primarily based on your age at the time that you sign the contract. Then, any pre-existing conditions may result in a small surcharge. For example, all 33-year-olds would pay the same base rate, but a health condition like asthma might result in a small percentage increase.
For expats that stay only for a maximum of 5 years in Germany, we have created a special expat tariff. Check out our ottonova expat tariff with special expat rates!
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Young, healthy well-earning professionals pay into the public insurance system, where funds are collected and used to finance the rest of the insured persons. While this system is designed to benefit the majority of Germans, those who won’t be in Germany for a long time will most likely see no real return on their investment.
If you are planning on a short-term stay in Germany, selecting a private plan will save you money while offering you better coverage.
In the public system, insurance coverage is very similar between the providers. The price will be the same for each company and coverage is mandated according to government regulations, so the differences are very small. But in the private system, the providers are able to offer different prices, perks and coverage. So consider what aspects are the most important for you. For example, is vision a main concern?
Public insurance offers no additional coverage or payments toward glasses, contacts or visual aids, while private insurance providers have various levels of coverage, depending on the company and their available plans.Most dental treatments are also not included in public insurance and other exceptions apply as well.
Or if digital services are important to you and your lifestyle, research the available options. Some insurance providers offer an app for your smartphone to help you manage your health documents or other digital services, like telemedicine, which can make your life easier.
Historically speaking, health insurance for children costs more in the private health insurance system. Public insurance premiums are only paid by working parents, so if you’re working, but your partner is at home raising your four children, you’ll only pay one premium to cover your family of six. In the private system, all insured persons must pay a premium, including children.
However, for the cost of your healthcare, privately insured persons may also receive better coverage and preferential treatment by most physicians. Everyone’s priorities are different, so consider carefully when choosing.
Additionally, public insurance providers generally do not cover the costs for extra treatments associated with raising children like in-vitro fertilization, childbirth classes, and others. But many private insurance companies may offer premium coverage options for these situations.
If you’d like to get a sense for which option would work better for you, use our special tool, the Life Calculator. When deciding on a health insurance company, consider factors like your current income, your relationship status and children, or planned children, and what kind of coverage is most important to you.
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