Health Insurance Options in Germany 2020

Article Sections

  • Overview
  • Government Health Insurance System (GKV)
  • Private Health Insurance (PKV)
  • Additional information for employees
  • Sick Pay Insurance
  • Cross-Border Care, Travel Insurance and Evacuation Benefits
  • Dental Care
  • Pharmacies
  • Additional information for self-employed or non-employed persons
  • Fast Facts: German Health Care

Overview

Germany has a reputation for having one of the best and most comprehensive health care systems in the world, providing its residents with health, sick pay and long-term nursing care insurance coverage. Approximately 88% of the population is a mandatory or a voluntary member of the public health scheme while the rest have private health insurance. The health insurance reform of 2007 requires everyone living in Germany to be insured for at least hospital and out-patient medical treatment.

The costs of the German public health care scheme are immense and constantly rising due to demographics as well as medical cost inflation and the large bureaucracy which continues to expand with each reform. The expected loss for the public health system in 2019 is over one billion Euros. Financing is through payments made by the members of the German public health scheme and their employers along with ever higher tax subsidies. The present health minister pushed through 20 new laws in 2018/2019 which go into effect in 2020, all of which will COST the system more money than before. The goal is to improve benefits, digitalize the health system (which is still very old-fashioned and analog) and to subsidize areas that have been underfinanced in the past years. Some planned changes will be that you can access a doctor online, call a special phone number to get an appointment with a specialist, use new apps provided by your doctor for specific diseases (for instance diabetes), and starting on March 1, 2020 it will be obligatory to have your children vaccinated against measles. Women over the age of 19 can access screening for cervical cancer. This will, among other improvements, cost the system more as the years go by. Reforms can also go in the opposite direction, reducing benefits and rationing them. That is the future of the German public health scheme which is a social health system and offers no contractual security going forward.

If you are employed in Germany your employer pays 50% of the total public health insurance premium. Each Krankenkasse is allowed to demand a supplemental payment from their members to meet their costs and as the average declared percentage amount is approximately 1.1 , in 2020 this means that the total is 15.7 of gross salary with the majority of Kassen.

You have three options for health insurance while living in Germany if you are required to show proof of health insurance: the government-regulated public health insurance scheme (GKV) , private health insurance from a German or international insurance company (PKV) or a combination of GKV and supplemental PKV. You can opt for a full private health insurance plan if your income is above the threshold amount of 62,550 Euros gross salary, if you are self-employed, not employed (a mini-job does not count) or you are over 55 years of age and not employed. Finding the best service provider for public health insurance or finding the most suitable coverage from a private health insurer while still at a competitive rate is not always easy but is well worth the effort.

As people have different requirements or expectations from health insurance, it is important to understand the system in order to filter out the most suitable plan while living in Germany. It is important to mention that you cannot simply switch between the public health scheme and private health insurance at will as certain prerequisites exist. Independent advice from experienced insurance brokers who understand the pros and cons of both systems as well as considering your individual circumstances is strongly advised.

Health insurance is not a commodity to be bought at the cheapest price but rather is a vital financial support in times of illness or after an accident.

Government Health Insurance System (GKV)

Most German residents (approx. 73 million people) are members of the government health system. If your gross salary is less than 62,550 Euros per year, or 5,213 Euros per month in 2020 then membership in the GKV is mandatory. The government health insurance scheme is administered by 108 Krankenkassen and they charge the same basic rate of 14.6 % plus a possible average supplemental rate of 1.1 % of your eligible gross salary with a cap set at a maximum monthly income of 4,688 Euros (2020 figures). If you earn more than this income threshold which is set each year, you do not pay a higher insurance premium. Assuming a maximum monthly health insurance premium of 736 Euros as an employee earning at or above the income threshold you are therefore a voluntary member and your own contribution will be approximately 368 Euros with your employer paying the other 368 Euros. The general minimum period of membership with any particular Krankenkasse is 18 months. You can switch government health fund providers by giving two months’ notice after 18 months membership or if a supplemental premium is increased. As a voluntary member of the GKV you can opt out at any time with a 2 month cancellation notice if you prefer a private health plan and have been accepted by the insurance company of your choice.

The medical benefits offered in the GKV include in-patient (hospital) care as a ward patient with the doctor on duty at your nearest hospital, out-patient care with registered doctors (Kassenaerzte) and basic dental care. Please note that there is no coverage for private doctors or surgeons, a semi-private or private room in hospital, alternative/homeopathic medical care, dental subsidies beyond the very basics, and vision products for adults or any medical benefits outside of Europe. Your nonworking dependents living at your address in Germany are presently insured at no additional cost and simply need to be registered with the same Krankenkasse as yourself as the paying member.

If you choose to join the German government system, you can register with any of the 108 Krankenkassen which are non-profit associations administrating the government health scheme. Some (for instance AOK, TK, SBK, BEK, DAK) are very large and have millions of members while others (often called BKKs) might have just a few thousand members. This does not mean that the benefits are very different, as all health insurance funds must adhere to the government regulations on the benefits they offer. The premiums may also vary somewhat due to changing regulations and it would also be optimal to research which voluntary supplemental programs the Krankenkasse offers in order to be able to participate in, for instance, a no-claims bonus, free checkups or discounts on supplemental health plans. Tip: Make sure you ask about the possibility of communicating in the English language to make your life easier, though only a limited number of Kassen actually offer this service and have English speaking staff.

You and your dependents must also become members of the government long-term nursing care scheme (Pflegepflichtversicherung). This covers a portion of the cost of meeting personal nursing needs, such as the feeding and bathing of those who become substantially disabled. Due to major reforms of the nursing care system in 2017/2019 there has been a further increase in the cost. The cost is 3.05% (or 3.3% if you have no children) of your gross salary (maximum approximately 155 Euros per month) of which your employer pays only up to 71 Euros.

THIS MAKES A MAXIMUM TOTAL OF APPROXIMATELY 890 Euros per month if you are earning 4,688 Euros or more as an employee. Your employer contributes approximately 439 Euros. Your dependent spouse and children residing in Germany are included in your membership at no additional cost if you register them.

If you would like additional insurance coverage to supplement the government system benefits, you can purchase a policy from any private health insurance company, German or international; for instance if you would like access to and reimbursement of costs for a private doctor and a private room in hospital, homeopathy and other alternative treatment or higher dental reimbursements. Emergency evacuation from places outside Germany, for instance from ski resorts, which are included with a private travel insurance policy should also be considered as these are not paid for by the state health insurance scheme and it would be very costly to have to pay for such benefits out of pocket.

Public health insurance funds sometimes offer supplemental insurance plans from a particular provider, offering a group rebate. Such tied plans are not always ideal as you would normally have a wider choice of benefits on the private health insurance market and you may be required to stick with your Krankenkasse longer than you would like to.

Private Health Insurance (PKV)

Private health insurance plans cover a wider choice of medical and dental treatment and generally provide broad geographical coverage. By having private health insurance you are considered a private patient and can expect a higher level of service from the medical profession. Hospitals and doctors depend to a certain extent on private patients to supplement their incomes and therefore welcome them. A private patient can also request and will often get, doctors who speak their native language. The private medical insurance market is served by about 40 German insurance companies, and there are premium/benefit combinations available to suit most budgets. Per person cost of full medical insurance is based on the level of benefits chosen, as well as on entry age and any pre-existing medical conditions. A major portion (up to 80%) of private medical insurance premiums has also been tax deductible from German income taxes since 2010.

Government insurance premiums cover you and your non-working dependents, whereas the private medical insurance premium is generally paid for each person to be covered. You can reduce the monthly cost of your private health insurance by agreeing to a deductible (also known as an excess or franchise). German private health insurance companies are not allowed to cancel your policy if you submit claims and are also required to put 10% of your premiums aside as a provision towards keeping the cost stable when you retire.

If you are considering purchasing an expatriate health insurance as a substitute for the government scheme, this could potentially become quite stressful because most of the foreign insurance companies are not registered with the “BaFin” to do business in Germany. Even those that are registered, find that their health insurance plans do not meet the standards set in the new reforms. The crux is that the German government insists that there are no set upper limits on reimbursement levels and there are no annual out-of-pocket deductibles higher than 5,000 Euros. Other issues involve how the insurance premiums are calculated. The present situation is that very few of the major international expatriate health insurers can provide a German language certificate recognized by the immigration authorities in Germany. Whether or not this will change depends on whether Germany fully recognizes European directives for cross-border selling of health insurance for non-Germans seeking a residence permit.

Be careful to avoid limited-term policies with no requirement for medical underwriting. These policies very rarely offer a permanent extension and do not cover pre-existing conditions. If you decide to stay longer than the limited contractual term (anywhere from one to five years) and the health insurance contract expires, it could be both difficult and much more expensive to get new health coverage at that point. In addition, even though you may have purchased such a plan from a German health insurance company before or upon your arrival in Germany, it may not be recognized by the visa authorities and you will be forced to purchase a permanent health insurance plan in order to be permitted to stay. Penalty fees may then apply.

Health insurance is not a commodity to be bought at the cheapest price but rather it is a vital financial support in times of illness or after an accident. Private health insurance policies offer various benefits levels and the scope and quality of the policy wording (terms and conditions) are of utmost importance if you want to avoid any unpleasant surprises if you ever need to claim on your policy.

Additional information for employees

You may choose a private health insurance (Private Krankenversicherung or PKV) instead of the government health plan if your gross salary is higher than 62,550 Euros per year (2020 figures). Self-employed persons, German civil servants and those persons working part-time and earning less than 450 Euros per month (mini-job) are also eligible.

If you are presently in the German public scheme and begin to earn more than 62,550 Euros per year, you can change to private health insurance with two months’ notice because you are no longer a mandatory member of the German public scheme (GKV) or you can remain in the public health scheme with the status of a voluntary member, always paying the maximum premium.

If upon arrival in Germany you wish to be privately insured, you will need to inform your company's human resources department within 14 days of your employment commencement date to avoid possible confusion; otherwise, you may find yourself automatically registered in the government system. It is your decision and your employer is not allowed to restrict your freedom of choice among the various Krankenkassen or private health insurance providers.

If you purchase a private medical insurance plan from a German health insurance company that provides a certificate recognized by the German government (Paragraph 257 SGB V Arbeitgeberbescheinigung) you may take advantage of the same employer subsidies as a government plan member. This translates to a maximum of 368 Euros per month of employer subsidy towards the cost of your private health insurance policy and up to 71 Euros for your private nursing care insurance. If such certification is not provided, your employer has the option, but is under no obligation, to compensate you for part of the cost of your medical insurance. Most German employers now demand this certificate as proof that your insurance benefits meet the regulations.

Sick Pay Insurance

Should you fall ill while in Germany, your employer will normally pay six weeks' full salary, after which the government scheme health fund (Krankenkasse) pays up to 70% of your gross income if you are a member of the GKV, (up to a maximum of approximately 3,281 Euros per month) as statutory sick pay (Krankengeld) for up to a maximum of 78 weeks. After social security deductions you would be left with a maximum of approximately 2,877 Euros to finance your normal monthly fixed expenses such as rent, groceries and other insurance policies.

If you are earning more than this per month, after tax deductions, it would be worth considering the purchase of supplemental sick pay insurance, which is available at reasonable rates. This is particularly important if your monthly fixed living costs are higher than 2,877 Euros. If you purchase full private medical insurance, you should also consider purchasing adequate sick pay insurance to meet your living expenses as you will not receive any statutory sick pay from the GKV. Please note that neither the private nor the statutory sick pay covers permanent disability and it is assumed that you will be returning to full employment. You should therefore consider purchasing a separate policy for permanent disability and critical illness.

Cross-Border Care, Travel Insurance and Evacuation Benefits

The German public health insurance system will provide you with limited medical and dental cover for travel within the EU. The EU cross-border regulations came into effect on October 25, 2013. This change meant that public patients can choose to have their medical care in any country in the EU, EEA state or Switzerland and receive a partial reimbursement from their local public insurance fund (i.e. Krankenkasse in Germany). As there are different procedures for hospital and out-patient services please contact your Krankenkasse before embarking on any cross-border medical or dental care. The contact number for the international liaison office: +49 (0)2289530-800 or per email

A large percentage of foreign doctors will handle you only as a private patient. You will, however only be reimbursed for the amount that the German public system would have paid for the treatment – sometimes only a fraction of the actual cost you actually paid. If you wish to be covered for the full amount of any medical outlay or plan to travel to non-EU countries, you should definitely purchase a private travel insurance policy. There are single trip and annual policies to choose from. The German government health system does not cover medical evacuation from any foreign countries. Please note that not all travel insurance policies cover evacuations, so always check the fine print before signing up.

Dental Care

In Germany, dental care can be expensive. For major dental work involving bridges, crowns or orthodontics, you must get a cost estimate and present it to your insurer prior to treatment; otherwise you could be faced with a very high bill to be paid out of your own pocket. If you have doubts about a recommended treatment, get a second opinion. Also please be careful: some dentists may suggest complicated and unnecessary dental work to unwary foreigners. The reimbursement amounts from the public health scheme are calculated based on a fixed price depending on the tooth work to be done and you can expect to pay between 30% and 80% out-of-pocket for dental work if you do not have a supplemental dental insurance policy in place. The fixed price system for pre-authorization of costs uses the absolute minimum standards and does not cover gold, porcelain or other materials. Supplemental dental insurance is worth considering if you would like to avoid unpleasant surprises.

Pharmacies

Germany has an extensive network of pharmacies (Apotheken), with branches on just about every second corner in town, easily recognized by a big red “A” or a green cross. The state health insurance scheme (GKV) generally provides reimbursement for prescription generic drugs, though with a co-payment, the scale of which depends on the cost of the medication. The public system is trying to reduce the immense cost of pharmaceuticals and has forced discounts from the large drug companies. The pharmacy must search for the lowest possible price for the generic medication when you present a prescription from the registered doctor as a public patient.

If you are privately insured, brand-name medication will normally be covered, as long as you have a prescription. You will have to pay the full cost of the prescription medicine immediately and then submit the receipts to your insurer for reimbursement. However, do not expect to be reimbursed by either the government or the private health insurance systems for over- the-counter remedies.

Additional information for self-employed, non-employed persons or retirees

It is illegal to be uninsured if you reside in Germany.

If you are basically in good health, you should try to purchase suitable benefits plans from a German private health insurance company willing to accept non-Germans. A qualified and experienced insurance broker specializing in expatriates will help you find the most suitable cover.

If you are self-employed and were already covered by an international insurer before the cut-off date of April 1, 2007, you should check to make sure your coverage is suitable for living in Germany. You will probably need to prove that your insurance is still in force and provide some certification in the German language to the visa authorities.

If you would like to keep the non-German insurance, please note that you must in any event still pay into the government long-term nursing care scheme (Pflegepflichtversicherung) and may also wish to purchase supplemental sick pay insurance. This may be difficult to find as German insurers are not particularly keen on insuring self-employed foreigners.

Finding a suitable health insurance for retirees is a challenge. If you have previously resided in Germany and were then a member of the German public health scheme you may be eligible to re-join. This is often difficult due to the problems of proving a previous membership and the Krankenkassen are anything but helpful. Selecting a private health insurance is also quite an issue if you have developed a chronic illness, had major surgery or simply due to your age find the premiums unaffordable. It is essential to speak to an independent health insurance broker with experience in this area before spending loads of time and becoming totally stressed, preferably before your arrival in Germany. A simple incoming travel health plan which is valid for three months can be a trap.

German private health insurance companies are forced to accept all applicants, irrespective of their health situation, in their “Basistarif” which became available from January 1, 2009, as long as the person is required to provide proof of health insurance, is not eligible for the German public health scheme and has the right to reside in Germany. In other words, if you have a serious pre-existing medical condition and cannot be accepted into normal private health insurance tariffs, you can purchase this tariff as a last resort. It offers similar benefits to the government system and the monthly cost is capped at the maximum rate of the Krankenkasse. Unfortunately the monthly premium is 736 Euros (2020 figures) for each adult plus approx. 250 Euros for each of your dependent children. In addition you must pay for the nursing care insurance. There is a lot of paperwork in setting up the Basistarif and you may find it difficult to find doctors willing to take you as a new patient because the amounts they may invoice you are very limited.

Fast Facts: German Health Care

  • The public health insurance rates charged by the Krankenkassen are 14.6% (plus 1.1% average supplemental premium) of your monthly income up to a maximum salary amount of 4,688 Euros. This means that the average monthly premium on the market for 108 public Krankenkassen can be up to 736 Euros.
  • In addition, mandatory nursing care insurance costs a maximum of 155 Euros per month.
  • Members of the state health plan pay up to 10 Euros in co-payments for prescription medicine and must be willing to accept generics.
  • Hospital stays cost 10 Euros per day (max. 280 Euros per year) for members of the state health plan.
  • Members of the state health plan can shop around for the best price and provider of supplemental insurance for dental, private doctor, private hospital accommodation etc.

Pros and cons of private health insurance:

  • Private health insurance which offers more choice is available to persons earning above the income threshold set each year or those who are not eligible for the Government scheme. It is available from 40 German health insurance companies. Many do not accept foreigners until they have been resident here for at least two years.
  • Pros: Choice of many tariffs, choice of doctors and hospitals (generally world-wide, though with some limitations), payment for alternative/natural remedies, higher reimbursements for dental work, reimbursements for vision products.
  • Cons: Each insured person has their own premium, based on the chosen tariff and the insured’s entry age. Underwriting can lead to a supplemental premium load if there are any pre-existing medical conditions.
  • Premiums must be paid even if you are ill or are not working due, for instance, to the raising of children. There are just a few tariffs which will subsidize these events.
  • There can be limits on dental reimbursements in the first years and co-insurance payments are also possible.
  • Switching between the public health scheme and full private health insurance should be carefully considered as you cannot change at will. Qualified and independent advice should be sought.

Copyright Cathy J. Matz-Townsend
Independent Insurance Broker
Hauptstrasse 175
65375 Oestrich-Winkel
Germany

Tel: 06723 6033518

matz-townsend-finanzplanung

All information is provided to the best of our knowledge as of January 2020 but we are not liable for its accuracy or completeness.

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