The German Health Care System is comprised of two separate types of insurance: compulsory and private.
Private health insurance in Germany is available only to those employed in certain professions who earn a certain amount. The private and compulsory styles of insurance differ in substance, and require an understanding of the variations.
Private insurance is designed to provide insurance based on the age and health of an individual, and can include packages specified to cover particular eventualities and level of insurance. This type of insurance aims to provide a level of cover appropriate to a particular lifestyle, aiming to provide neither too little nor too much. Private insurance in this way attempts to protect against both being under-insured and paying higher than necessary premiums. Online services are available to calculate monthly premiums appropriate to an individual’s lifestyle, career and health. It must be noted that care should be taken in order to provide accurate information, or the service may produce an incorrect result and higher than necessary costs.
Those who are either employees of a company, self-employed or clerks may (under particular circumstances) be eligible for a private insurance plan. While employees are usually covered by the compulsory insurance, they may become privately insured once they cross a specified income level known as the “Jahresarbeitsentgeltgrenze” or “Versicherungspflichtgrenze” in German. This level, as of 2016, is an annual salary of 56,250 Euros or 4688 Euros a month. An individual’s income must cross these threshold for over a year in order to qualify for private insurance. Income is measured before tax, and includes:
- Regular monthly income from wages and salary
- Regular singular payments (such as Christmas or Holiday payments)
- Benefits or bonuses
- Additional capital accruing benefits
- Overtime payments
- Additional income from a second job
For those interested in private insurance, the impact of an extended family should be made clear. Families with a large number of children can find that private insurance becomes much more expensive, while those who are single or have a household with two incomes can benefit from certain advantages. Students can be removed from compulsory insurance and gain a specially created student insurance plan that has lower costs.
Self-employed individuals will find that their private insurance has separate considerations. Their insurance premiums are not calculated on income, due to the fact that this income will generally return into the business itself, meaning that compulsory insurance payments will be high while private plans can offer a number of options that may be more beneficial and cost-effective.
Artists and journalists are also insured in a slightly different manner. They are covered by particular rights and are often covered by the “Künstlersozialkass”. In order for an artist or journalist to gain a private insurance plan, they must reach the income threshold specified previously.
Clerks are eligible to receive contributions from their employer for insurance and any potential treatments. This is a special option for clerks, which may help with costs. They are also eligible for compulsory insurance, and may choose based on costs and their particular circumstance. Help is also available from employers towards private insurance.
In general, private insurance can be advantageous as it offers:
- Free choice of doctor and hospital, often with better treatment
- Options for travel insurance
- Particular offers and flexible benefits
- Fees unrelated to income
- Advantages for young people, those with a high income and particular employments such as clerks
When deciding on a private insurance plan, certain options are available. In brief, the options are basic, standard or comfort. Basic plans offers limited service, similar in style to compulsory insurance, with low fees. Standard plans offer a middle ground between cost and cover, offering a comprehensive insurance while comfort offers no self-payments or limits at a high cost.
For the elderly, private insurance can become a costly affair as fees rise in-line with the potential for illness in an individual. To help with this is a system known as “Beitragsentlastungstarife”, which helps to maintain reasonable costs.
A controversial option is the so-called cheap-scales or first-time user scale. These are aimed at young clients with low cost plans which often provide little effective cover.
Insurance within Germany is an interesting topic that requires careful study. Basic private plans are often not necessary, as they provide a similar service to compulsory insurance at higher costs. It is important to note the self-payment or deductible level in a plan. Private insurance plans offer refunds of cost after treatment, meaning that payment at the time of illness is often required.
Those interested in a private health insurance plan must research carefully the options available. Private insurance within Germany is not available for everyone, can become expensive and is not the best option for everyone. A good first step is to check with an online calculator to gain a general idea of potential costs and cover, followed by surveying the individual plans, deals and cover available.