One of the first administrative hurdles you’ll be faced with as a newly arrived expat is figuring out whether to take public or private health insurance.
For those of you who are self-employed, the situation is different than it is for employees. You automatically have a choice of public or private insurance. We cover options for insurance for freelancers separately.
However, depending on how you view it, the good news is that as an employee, you may not even need to make a choice.
Public or Private Health Insurance in Germany: What's best? Do I even have a choice?
If you’re an employee, and earn less than €60,750 (in 2019), then you are automatically obliged to take out public insurance. In fact, over 90% of residents in Germany are in the public system.
There are many different public health insurers (or Gesetzliche Krankenkassen in German) to choose from. If you’re wondering who to go with, the most popular public insurance company is Techniker Krankenkasse (TK).
Some of the reasons to go with TK include:
TK constantly ranks as the best-rated public health insurance in Germany.
Their sign-up form and customer service is in English
You can sign up online here including a digital signature – and you don’t need to print or post any paper forms (which is definitely a relief for anyone familiar with Germany's paper-and-postal service-based correspondence culture!)
What if I earn more than €60,750?
So, you earn above the €60,750 per annum gross threshold, and you’re not self-employed?
Now let’s drill down into the detail of who may be better served through the public health insurance system and who may be better advised to go private.
Should I go Private?
This is not a question an expat services website can or should answer! Healthcare is a deeply personal, tailored product and each individual has different needs and expectations.
However, we can guide you based on a couple of examples.
Let's take a look at where it may make sense to go for one option over the other, before we go on to evaluate some other nuances and considerations which may be important to you.
– 30-year-old male
– No history of serious medical conditions
– No dependent children
– Annual gross salary of €75,000
– Intends to spend a few years in Germany before returning home
In this instance, it would in most cases make sense to seriously consider private health insurance.
As a higher earner, the contributions into the public system would mean that it is relatively expensive (because, as we mentioned in our article on how the German healthcare system works, public health insurance contributions are a percentage of gross salary).
Whereas with private insurance the premium is based on risk and this person is young, in good health and with no dependent family members.
At this point in life for this individual, it would almost certainly be cheaper to go private.
– 45-year-old male
– Married with 2 children
– Planning to stay permanently
– Non-working spouse
Here a whole new set of factors come in to play.
First of all he is 15 years older. In almost all cases a private health insurance company would consider him to be a higher risk.
Secondly, he has two dependent kids whom he will also have to insure. Let's assume, for the sake of this example, that his spouse is not working full time and therefore cannot insure them on her policy.
Finally, his move is likely to be permanent. Let's not forget that as this person gets older, his insurance will become a higher risk to the insurer and his premium as such will almost certainly rise over time. Irrelevant for a temporary stay but a vitally important consideration for those making the move a permanent one.
These criteria would swing more towards a public health insurance option being the best bet.
Private Health Insurance: The 5 Year Stay Rule
Health insurance in Germany may seem expensive, and to most people it certainly is (unless you’ve lived in the US!)
One of the reasons for this is the building blocks of the legislation around German health insurance. Insurers must front-load contributions so as increases in premiums are more gradual when patients get older and thus become a higher risk.
In simple terms, this means when you’re young and healthy, you’re subsidising for the time when you’re older and sicker.
But what if you’re not planning for Germany to be a forever home? This is where the 5 year rule comes in.
Anyone who is staying in the country for 5 years or less is not obliged to take out a policy which is front-loaded to cover risks in older age.
Ottanova, for example, have developed a product which offers comprehensive private health insurance (in 3 tiers of coverage) to expats who want “proper” health insurance but only plan to stay in Germany less than 5 years.
Sign-ups and correspondence are 100% in English, they offer an app to find an English speaking doctor and the terms and conditions of what is covered in the tariffs are much clearer to understand than a traditional German private health insurance policy.
This is not to be confused with bare bones, short-term policies such as those taken out by au-pairs and exchange students for their temporary stay. Or for those applying for a residence permit who must show on their application that they are covered for the minimum legal requirement for health insurance in Germany.
Watch out if you have pre-existing conditions
A few years ago I worked with a Polish colleague who was roughly the same age as me, single and with no kids.
He could not get private health insurance when he moved to Germany because he has diabetes. He had no option but to choose public health coverage, which as a relatively high earner meant that his healthcare contributions were substantially higher than mine were with private insurance (when measured as a percentage of gross salary).
The cold, hard reason is that he had a condition which requires lifelong treatment. Therefore he was viewed as a high risk by private health insurance companies.
Private health insurers are under no obligation to accept your application. If you have pre-existing conditions which make you a risky prospect in their eyes, they may refuse you coverage.
If you fall into this bracket, you're best bet is to contact a broker such as our partners KL for Expats. They will save you a lot of time and effort and advise which insurers (if any) will accept you.
In extreme cases, you may have no other option but to take public health insurance.
Other important considerations
Excess / Deductibles
Private health insurance, similar to other insurance products, will have an excess or deductible which the policyholder has to contribute towards, whenever making a claim. So while public insurance covers you for 100% of the cost of your policy coverage, private insurance may not even reimburse you if your medical bills are relatively low, due to your annual excess or deductible.
Public insurance typically does not cover you for non-essential treatments such as dental care, alternative medicine, cosmetic surgery, chiropractic and physiotherapy, non-critical treatment of sports injuries, as well as nice-to-have extras such as a private room during a hospital stay. Private healthcare can cover all of these if you're willing to pay for a more comprehensive policy.
Whereas hospitals and doctors typically will invoice the public insurers directly, private policy holders will have to pay their invoices first to each medical service provider and then submit a claim to their insurer. If you visit the doctor frequently or are hospitalised, then this can quickly become an administrative pain in the you know what.
Switching providers or your level of coverage
It's not as easy as you may think to switch providers within the private system. Usually your insurer will only allow you to cancel your cover if they raise the cost of your coverage or otherwise change your terms and conditions.
It's also not always that straightforward to increase your level of care. While it's easy to reduce the level of coverage (because you're reducing the risk the insurer is taking on), they may want you to undergo a medical if you wish to increase your cover.
Private insurance policies will often, but not always, have what is called a premium refund or no claims bonus. The German word is Beitragsrückerstattung (try saying that after a few beers!) This is a refund given if you don't make a claim within a calendar year. Depending on the policy, this can usually range from 1 month to 5 months' worth of contributions.
Something to consider looking for if you very rarely visit the doctor under normal circumstances.
I had this and didn't claim any minor visits to the doctor or prescription costs I had incurred for several years. My contribution refunds added up to several thousand Euro over time.
But aren’t there many public insurers in Germany?
Yes, there are many gesetzliche Krankenkassen as they are known in German, each one with their own nuances and opt-ins and specific advantages or disadvantages depending on what an individual is specifically looking for.
German law stipulates that they all must cover statutory healthcare requirements such as inpatient and outpatient care, treatment for chronic diseases and pre-existing conditions.
However, public insurers will usually (but not always) exclude common but non-essential medical requirements such as:
- Dental care
- Non-critical sports injuries
- Alternative medicine, such as healing professionals practising techniques such as acupuncture and yoga
- Preventative treatment such as nutritional advice or chiropractic treatments
- Cosmetic surgery
You will need to shop around to understand which of these may, or may not, be covered by various insurers.
Can I Switch From Private Back To Public?
No, you cannot simply opt back in when your insurance company jacks up the cost of the insurance policy. Otherwise, everyone would try to do it when they get older and sicker, and the whole system would become unsustainable.
There are some exceptions and loopholes other than these, but it is extremely complex and beyond the scope of this article.
Generally speaing, you only have 2 options to switch from private back to public health insurance:
1. Your salary falls below €60,7510 (the threshold for private insurance eligibility)
2. You lose your job and register as unemployed
The EU gender directive
Just a final note to make sure you're aware of a European Union law which came into force at the end of 2012. Insurers may no longer discriminate between male and female insurance policies on the grounds of sexual equality.
They are an English-speaking independent insurance broker based in Cologne, specialising in consultations via phone and Skype for expat employees looking for tailor-made comprehensive health insurance plans.
Looking for public health insurance in Germany? Around 90% of people in Germany go with the public health insurance system.
Techniker Krankenkasse (or TK) is the biggest and has been voted best public health insurance company 13 times in a row. Many expats go with TK due to the great coverage offered and also having English support.
Sign up here completely online in English, including digital signature (no need to print out or scan your application).
Disclaimer & Disclosure
Live Work Germany is an affiliate of KL for Expats and Techniker Krankenkasse. This means we receive a modest commission from these partners for anyone who signs up for their products. It has no bearing whatsoever on the final price of your cover.
We are not connected in any other way to these companies.
The content in this article should be used for orientation purposes and is definitely not considered a substitute for professional advice from an insurance broker.