Public and private health insurance in Germany. What is the difference?

Getting private insurance is not easy, and in some cases impossible. 

The difference between public and private health insurance makes it possible to choose the best option for yourself, weighing all the pros and cons.

Read also:  Health insurance in Germany

If you have been living in Germany for a long time, then you probably had to deal with such a situation. You sit for a long time waiting for a doctor’s appointment, and when your turn comes, a person who has just arrived boldly enters the office in front of you. To your bewildered question “Why so?” they politely answer you: “We are on private insurance.”

Going to doctors in Germany without a queue is a kind of privilege. But at the same time, getting private insurance is not easy, and in some cases even impossible.

Public and private health insurance. What are the differences?

There are two insurance systems in Germany: state (German gesetzliche Krankenversicherung GKV) and private (German private Krankenversicherung PKV), which have significant differences.

For example, unlike state funds that provide almost the same services, private insurance provides for the individual to independently determine which medical services his policy will cover.

You can choose insurance at a lower cost with a set of services similar to public insurance, or insure your health to the maximum. The amount of the insurance premium depends on factors such as:

• age;
• bad habits;
• the presence of chronic diseases;
• body mass index, etc.

The main difference between the state health insurance system in Germany is “solidarity”, that is, support for the socially weak segments of the population. Such insurance is paid for by taxpayers. It is the same for everyone, regardless of their income.

The second feature of state health insurance is the ability to include family members in one contract. Private insurance implies individuality, ie. A separate policy must be issued for each person. For example, for a family of 4 people with one worker, separate contracts for each person will be quite expensive, so it is more profitable for an employee to use the state insurance fund.

The third difference between state insurance is the possibility of concluding a contract at any age (from birthday to old age), regardless of social status, presence / absence of work.

In private health insurance of Germany, the rules are completely different. To become a member in 2021, you must have an income of at least 64,350 euros gross per year. However, this limit may increase slightly each year.

As part of private health insurance, you will have to pay 900 euros per month, 450 of which is paid by the employee himself and 450 euros is paid by his employer. At the same time, private insurance companies themselves offer bonuses. But this does not mean that you should immediately rush to draw up a private health insurance contract. We must first assess whether there is a real benefit in these proposals. And when calculating, be sure to take taxes into account. And for this it is better to consult with experts who understand these issues.

Now we will consider the issues of insuring an entrepreneur. Here the matter is as follows. They have the right, regardless of income, to go into private insurance or remain in the state fund, provided that the person has paid contributions for more than 12 months.

If the entrepreneur has just arrived in Germany from abroad, then the only option for him will be to take out a private health insurance policy in a private company. And since the entrepreneur does not have an employer, then, regardless of the form of insurance, he is obliged to pay the full amount of the contribution on his own.

Students under the age of 31 can also choose between public and private health insurance. Students over this age can only take out private insurance, but at more preferential rates than employees and entrepreneurs.

As you can see, unlike state insurance, where there are no age restrictions, this indicator matters in private health insurance funds. The sooner you sign a contract and start paying your dues, the larger the savings will be. It can be very useful in old age, when many problems tend to appear. At the same time, a person can include the option “lowering the contribution” in the amount that is being paid. This allows you to reduce its size to a minimum over time.

In state insurance, the change in contributions occurs only in proportion to the change in the income of the insured. In the private sector of health insurance, the change in the amount of contributions may occur depending on inflation, the emergence of new treatment technologies, the rise in price of medicines, etc.

If a person loses his job, the contributions to the state health insurance fund are taken over by the agency that pays unemployment benefits. In the case of private insurance, the unemployed person receives only that part of the rate, which includes the provision of basic medical care.

Upon retirement, the contribution to the state insurance is 10-11% of the amount of the pension. And payment to a private health insurance company is made in accordance with the rate depicted in the contract that has been agreed upon.

Please note that it will not work to leave the private insurance system for the state pension system, since such a transition is possible only up to the age of 55. And even before that age there are difficulties that can be overcome only with the help of a specialist.

But you can change one state insurance company for another without any problems if you have been insured for a year and made contributions.

Conclusions

There are differences between public and private health insurance. They should always be taken into account when choosing a health insurance fund. To make the right decision, seek help from those who understand these issues.