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Health insurance systems in Germany: This is what you really need to know!

21 August 2020

The fact is: In Germany, health insurance is compulsory. In this article I will explain the different types of health insurances, their advantages and disadvantages and how you can find out which of the insurance models suits your life situation, profession and income best.


Public and private health insurance: What is the difference?

First of all, we distinguish between 2 different systems, the legal and the private. The statutory health insurance (GKV) lives from the solidarity principle. This means that richer people pay more than poorer people. The contribution is calculated as a percentage of the gross income. In case you have a very low income or no income at all (e.g. children), you can co-insure through your spouse or parents. In the private health insurance (PKV) each insured person provides for its personal risk. Premiums are therefore calculated individually on the basis of the state of health at the start of the insurance, the age of entry and the benefits requested in the tariff. In contrast to the GKV, income plays no role here.

The performance principle

Next, we need to clarify the differences within the services.

In the statutory health insurance, the benefits for the insured are unchangeably predetermined. In the so-called benefit catalogue you can find which benefits are covered and whether the insured person has to make a co-payment. Some health insurance companies voluntarily offer more services. In private health insurance, the insured person chooses the scope of his or her own benefits. In this case, bills must first be paid by the insured and the money will be refunded after submission to the private health insurance. This difference in benefits is clearly noticeable during visits to the doctor or hospital stays. As a member of the statutory system, you act according to the following principle: ESNP. E= Economic, S= Sufficient, N= Necessary, P= Practical. Here, the doctor and health insurance company decide on the treatment of the insured. This is the so-called principle of benefits in kind. In the private health insurance system, the doctor and patient decide on the treatment and the insurance company reimburses the costs. This is called the cost reimbursement principle. 

Requirements for switching to private health insurance and good news for all those with statutory health insurance

Next I have both good and bad news for you. Let's start with the bad: not everyone who now considers private health insurance an attractive system can become a member of it. In order to be allowed to join, one must be a student, self-employed person, freelancer, civil servant or employee with a high income. Even if you meet one of these conditions, there is still the following to consider. Students must have opted for private health insurance by 3 months after the start of their studies at the latest (in special cases it is still possible to change after that). Employees must have an income above the compulsory insurance limit for at least 1 year. To be able to change this year, one would have to receive a monthly gross of 5,212.50 € or an annual gross of 62,550 €. Self-employed persons, freelancers and civil servants have the easiest time here. Their income is not important and there is nothing else to consider. Finally, the good news. If you do not meet any of these criteria, there is still a possibility to benefit from the advantages of private health insurance. Supplementary insurance can be purchased by every statutory insured person by answering a few health questions and thus also the advantages of private health insurance.

Children in health insurance

Before I share my personal conclusion with you, let us take care of one last, but for many very important question: What about the insurance for my children? In the statutory health insurance, children can usually be insured free of charge through their parents. If one parent is privately insured, the child must usually also join the private health insurance. In contrast to the GKV, parents must pay contributions for each child. However, due to the special rates for children, these are quite reasonable.

My conclusion on health insurance

In conclusion, I can say that those who meet the criteria for private health insurance and have no difficulty in advancing the money for treatment can buy first-class, individual insurance cover for their health in this system. As an employee with an income starting from 4.687,50 € gross per month, it is also worthwhile to think about a change from a financial point of view, as with this income, one inevitably pays the maximum contribution to the compulsory health insurance. Here one can even achieve a more favourable contribution with better services in the private health insurance. Nonetheless, the GKV also offers good protection and can be extended if necessary by additional insurance in the scope of benefits. In addition, no contributions for children are to be paid here. So if you have extensive family planning, it is much cheaper in the statutory health insurance. Ultimately, this decision should be well thought through and prepared with a specialist: once you decide on private health insurance, you cannot switch back and forth between the statutory and private systems at will.

As your contact person for all matters concerning insurance, I am of course always available to help you with such decisions and the possible implementation of a change to private health insurance or the supplementation of statutory health insurance benefits with supplementary insurance.

Topics: Startup Tips
Mark Winkler

Written by Mark Winkler

Mark Winkler is an insurance broker for the SIGNAL IDUNA Group. Some of you already know him from personal conversations, as he has been the contact person for all startups in the SpinLab on insurance topics since May 1, 2020. Thanks to his 20 years of professional experience, he can assist you with his in-depth knowledge of private and corporate clients in all insurance-related matters. He can accompany you and your startup and help you to get rid of some of the obstacles that arise from various risks with the appropriate insurance.

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