Public vs private insurance in Germany: what is the difference?

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If you have just discovered the German health insurance system, it might be difficult to understand the differences between private and public health insurance in Germany.

Based on industry experts & experience, this guide will help you do that. At the end, you should be able to tell what system is best suited to your life situation, and what to do next.

private vs public health insurance in Germany

Public vs private insurance in Germany: TL;DR

We have crafted this long-form guide for a deeper understanding of the differences between private and public health insurance in Germany. Here are the main learnings:

  • The amount of contributions in the public system is set by income. In the private system, the premium by age, health and personal preferences.
  • Everyone is eligible for statutory health insurance, provided they do not have to take out private insurance.
  • Private companies have to provide benefits according to the contract they sign with up. Those benefits cannot be reduced over time. However, those benefits are highly dependent the price you are willing to pay.
  • Consider going private insurance only if you have secured long-term income or if you don’t have another choice right now.
  • If you can chose public vs private insurance in Germany, you should draft a budget to decide if it’s worth it to you in the long run. We have a dedicated guide to help you in that decision: Switching to private health insurance in Germany: consider this first.

Feel free to ask questions in the comments too. I gladly answer them.

Bastien

What is the difference between private and public in Germany?

Private health insurance will has undeniable benefits: For example, it frequently allows for shorter wait times for a specialist appointment as well as treatment by highly paid specialists and using cutting-edge medical treatments. However, these advantages are only available through high tariffs. The basic reality in private health insurance is that exceptionally low-cost contracts frequently provide minimal protection. They even provide less than the statutory health insurers for some services.

In contrast, statutory health insurance is a solidarity system in which all insured persons are treated similarly and receive the same protection – regardless of how much they contribute. Those who seek additional benefits than what the law requires can get private supplementary insurance.

Who is the public system for?

Everyone gets the same advantages under statutory health insurance, regardless of age, wealth or health. 

  • The contribution is completely based on income. People who have statutory health insurance pay 14.6 percent of their income for health insurance. The employer pays half of the health insurance contribution for  employees. However, income is only counted up to the so-called income threshold of 4,837.50 euros per month (as of 2021 and 2022).
  • Children and spouses with no source of income are likewise covered for free, so it’s usually preferred by families
  • Students, self-employed individuals, and other low-income voluntarily insured individuals must make a limited payment. 
  • Best for most people, families, people with unstable or lower income.

Who is the private system for?

Private health insurance is only relevant to civil servants, self-employed individuals, students, and employees whose annual income exceeds a certain threshold.

  • This threshold is 64,350 euros gross per year in in 2022. Employers also pay half of the payment for employees, but only up to the maximum rate for a person with statutory insurance. 
  • Each covered person, including spouses and children, must make a separate contribution. A good tariff will cost you between 500 and 600 euros each month. 
  • Not everyone who is legally permitted to sign up for private health insurance should do so.
  • Private as opposed to statutory health insurance companies, are allowed to reject applications if they have a pre-conditions.
  • In the case you have no other option than private, those companies will only offer you basic and pretty limited contracts. 
  • Best for people without kids with a large income and enough assets for the future too.

The decision to get private health insurance is life-altering, because returning to the statutory system is difficult. As a result, you should budget a change ahead of time, for the rest of your life.


Costs evolution over time in both systems

  • Statutory health insurance contributions are always set by your level of income, regardless of your life situations. If you earn less at a later stage, your contributions will automatically drop too. It’s unlikely not to afford them.
  • Private health insurance premiums are determined by age, health, and insurance benefits rather than income. 

While young, healthy people often pay lower premiums than those in statutory health insurance, private insurance premiums sometimes increase many times over in old age. Even with old-age reserves (Altersrückstellungen), expenditures accrue over time as a result of greater insured expenses and medical developments. That’s true even during retirement.

Many private health insurers provide deductible to lower premiums. In this situation, insured individuals carry their own health-care costs up to the agreed-upon level in exchange for lower rates. However, because you cannormally only lower the deductible following a new health check, the size of the deductible should be carefully examined.

If you have become unwell in the meanwhile (heart issues, back problems, etc), you will no longer be able to reduce the deductible. Salaried employees gain less from deductible savings than self-employed individuals since they split premiums with their employer.

Costs can sometimes spiral out of control in the private system. A serious budgeting effort is required.

Benefits evolution over time in both systems

  • The statutory health insurance benefits catalog is frequently updated or restricted as part of healthcare system reforms. As a result, it is unclear which benefits the SHI will cover in the future. In recent years, coverage for dental care, sight care or medications have been reduced in Germany.
  • In the private system, contractually agreed-upon benefits cannot be revoked retroactively, nor can they be easily adjusted. 

While statutory health insurers can adjust rates in response to medical innovations, some rates in private health insurance are limited to contract (for example, a list of medical aids like prostheses). In other words: future innovations might not be covered with private.

More benefits are only possible by changing to a different but that’s usually not financially recommended.


Which services are covered by public vs private insurance in Germany?

It is very difficult to compare benefits covered by public and private health insurance. That’s because individual pick and choose in the private system.

We can give it a try in broads terms. That’s what we do in this table. But remember you cannot based your choice on those elements alone.

  PublicPrivate
Doctors & specialistsPaymentSorted between the provider and the practice directly.Pay the bill first, get refund from your provider later.
 Choice of practiceOnly doctors accepting public patients.Free choice (when option is booked)
 Medication10% co-payment for prescriptions (5-10€). Must pay other medication yourself.Full refund. Deductible may apply.
 PsychotherapyOnly approved therapies. Max 300 sessions possible.Depends on contracts, usually limited to a few sessions only (20 – 30 per year)
 Medical aids (wheelchairs, prostheses, etc.)Variable coverage, 10% additional payment (5-10€)Tied to contract list, cannot change with time, limited refunds often.
———— ——————– ———————————- ———————–
Hospital staysDoctorDoctor on dutyChief physician, doctor on duty in a few tariffs
 RoomShared rooms usuallyMostly single or double rooms
 Choice of hospitalLimited choice of hospitalsFree choice of hospital, private clinic, depending on contract
 Additional payment€10 per day for a maximum of 28 days a yearno
————– —————- ———————————- ————————–
 Dental careTreatmentFull coverage for basic care, limited for more expensive treatmentsNo restriction to basic service, pays 50% to 100% depending on the contract.
 Crowns, dentures60-75% of costs for standard service but some additional costs may applyNo restriction to basic service, pays 50% to 100% depending on the contract.
———— —————— ———————————- ————————
 Sick paySick pay70% of the gross earnings or max. 90% net, also in the case of a sick child (from the 43rd day).*Beginning and amount of payment by clause, no money if the child is sick
 Maternity leave (prenatal)max. 13 €/day maternity allowance + employer top-up to match net salary.*Max. 210€ public maternity benefit depending on the contract.
 Maternity/paternity leave (post natal)No contributions paid during leave. *Pay premiums during your leave also.
* Additional rules applies for voluntarily insured people.

Switching health insurance providers in both systems

While patients with statutory health insurance can change providers at any moment, transferring from one private health insurance provider to another usually does not make sense. In theory, privately insured people can select another provider, but they will lose a significant portion of their age reserves. As a result, it is critical to select a tariff with favorable terms from the start.

Returning to statutory health insurance is only conceivable in extraordinary circumstances (unemployment or return to employee status before 55). That is because Germany want to avoid that healthy, high-income people stay with private health insurance when they are young and then switching to statutory health insurance when they are old.


Finding the right system and right policy for me

Most benefits are the same for all providers in the case of statutory health insurance. The additional contribution, service, and additional benefits vary only slightly. These extra benefits include travel vaccines, alternative medicine methods, preventive exams, and family benefits. You can turn to providers with the highest level of satisfaction:

Private health insurance is far more complicated to chose, and picking the incorrect provider/contract can be costly in the long run. If you begin with a low-cost entry-level tariff, you can usually only expand the benefits later at an additional expense. Entry-level rates can lack critical services.

You can also turn to reputable brokers catering to foreigners in Germany like Feather Insurance. They are not incentivized the same way as the rest of the industry. They will tell you if you should go with public instead.

Finding the right private provider takes time. You can read how to pick the right policy in this dedicated guide: Picking the right private health insurance in Germany


Private vs public insurance in Germany – conclusion

Private health insurance is not always superior to statutory health insurance. A private health insurance plan with extensive benefits is also quite expensive. Anyone considering purchasing private health insurance should ensure that they can afford the increasing premiums in the long run.

For most people, going public and signing for additional protection (e.g: dental) is a good winning combo.

If you’ve made it this far: well done. That was a long guide. Feel free to ask questions in the comments if something is still unclear.

Bastien

Sources: 1, 2, 3, 4