A how-to guide to private health insurance

Health insurance is mandatory in Germany. If you earn over a certain amount, work in a specific role or have a specific employment status, you can decide whether to take out statutory or private health insurance. If you opt to insure yourself privately, you will enjoy a number of benefits. In this how-to guide, we explain when it makes sense to take out private health insurance, what the benefits are and how it all works.

When does it make sense to take out private health insurance?

Private health insurance protects those who do not have statutory health insurance or who are exempt from the requirement to take it out. It is a worthwhile option for employed people who earn at least 64,350 euros a year, civil servants, the self-employed and freelancers who value high-quality healthcare tailored to their needs.

What are the benefits of private health insurance?

Private health insurance generally covers you for a much wider range of services than statutory health insurance. This means that if you fall ill, private health insurance offers you many more opportunities to receive specialist, comprehensive treatment and care. This is especially beneficial if you develop a complex condition. In these cases, private health insurance pays for a wider range of treatment options than are covered by statutory health insurance.

Here are some of the benefits you can expect with private health insurance:

• Shorter waiting times (for appointments and treatment)
• Access to the latest medical advances
• Services cannot be cut or reduced
• Choice of hospital and doctor
• Flexibility to change how much you pay for your premiums
• Premiums are not determined by your income
• Optional premium refunds

You can tailor your policy to your requirements and future plans. Private health insurance also allows you to decide exactly how you would like to cover your health. For example, you could select a policy that gives you a room to yourself if you have to stay in hospital. Many insurance policies also give mothers the chance to benefit from up to six months of free cover after childbirth.

You can also choose how high you would like your excess to be each year. Your private health insurance provider will then cover all costs exceeding this excess. For a slightly higher monthly premium, you can, of course, also choose a policy with no excess.

How does private health insurance work?

One of the main differences between private and statutory health insurance is the process by which any medical care you require is paid for. Private health insurance works according to the cost-reimbursement principle, which is much simpler than it sounds. After visiting the doctor, you will receive an invoice for the treatment costs. All you need to do is submit this invoice to your insurance provider using an app. Your insurance provider will then check the invoice and transfer you the full amount less your chosen excess within just a few working days. After that, you can transfer this amount directly to your healthcare provider. With this process, there is generally no need for you to fork out your own money in advance.

The procedure is similar for medications, although in this case you pay for them yourself in the pharmacy before the costs are reimbursed to you. Depending on your insurance policy, your insurance provider may even cover the full amount (with statutory health insurance, you are often required to pay a small fee).

Operations and inpatient services work differently. Here, the hospital bills your insurance provider directly for the costs. This means that you don’t need to pay for anything upfront or worry about dealing with any invoices.

Some private health insurance policies will refund a portion of your premium payments to you if you do not make any claims for a certain period of time (usually one year). The aim of this refund is to encourage you to act responsibly and only see a doctor when you need to.

How are the premiums calculated?

Statutory health insurance premiums are calculated on the basis of the policyholder’s gross salary. This means that the more you earn, the more you pay for your health insurance (up to a maximum limit).

Private health insurance does things differently. Since you can choose which medical services you would like your policy to cover, your premiums are calculated individually depending on your needs. Your age also influences the amount you pay for private health insurance. Your private health insurance provider will calculate how much your healthcare will cost throughout your lifetime based on an average person of your age. Your health insurance provider makes provisions for the healthcare you will need as you get older by using your premiums to build up age reserves. This means that you pay more when you are younger to help cover your costs later in life. The benefit of this is that the sooner you take out a private health insurance plan, the less you need to pay to build up your age reserves because you will be making payments for a longer period over your lifetime.

How can I take out a private health insurance plan?

Unlike with statutory health insurance, private health insurance providers are not required to accept everyone who wishes to be insured with them. Instead, they will generally ask you a series of questions about your health before deciding whether to insure you. This usually doesn’t pose a problem if you are still young, fit and healthy.

If you value high-quality health care, you should consider switching to private health insurance if you are eligible to do so.

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