Public Or Private Health Insurance In Germany?

Many people living in Germany wonder which health insurance system is better for them. Public or private health insurance? How much can you save by switching? 🤔

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Health insurance is a major issue for many people living in Germany – especially many people from the expat community coming to Germany for the first time. There are many misconceptions about German health insurance in general and even more about private health insurance in particular.

Most people living in Germany are forced by the government to be a member of public health insurance anyway, others have the freedom to decide freely if they want to become a member of the private health insurance system. If you do switch to private health insurance, you can influence your insurance premium with different factors.

So if you are living in Germany and wonder which German health insurance system (public or private) is the right one for you, then this article will help you make the decision that is best for your personal situation.

The first part of this article will sum up the monthly premiums of the respective health insurance system and the second part of this article will take a look at all possible deductions that will help you to decrease your monthly health insurance premium again.

How To Select Between Public & Private Health Insurance

Important: Please do not select the right German health insurance system based solely on the monthly premium you would have to pay. Rather focus on the coverage first and then figure out if you are willing to pay for the benefits that you will be getting.

Unfortunately, not everybody living in Germany can choose freely in which health insurance system they want to be insured. The German government introduced a minimum salary one has to earn in order to switch from public to private health insurance. In 2022 that minimum threshold is 64.350€ gross salary per year.

Everybody earning less is forced by the German government into public health insurance (except self-employed people that do not pay into the German social security system). As the average German salary is 40.551€ according to the German public pension (Deutsche Rentenversicherung), the majority of people living in Germany are insured in the public health insurance system anyway.

In Germany, average salary means average healthcare which would be public health insurance. Above-average salary means one can choose freely which health insurance system he or she wants to belong to. So above average salary means also one can have access to above-average healthcare which would be private health insurance.

“Average salary means average healthcare in Germany. Above average salary means you can afford above average healthcare in the private health insurance system.”

Premium: Public Health Insurance

In order to get an objective comparison let us select a regular employee in Germany that is earning exactly the threshold salary of 64.350€ gross every year. His salary is important because the public health insurance premium is based on his income. The premium of private health insurance is calculated individually and does not factor in the salary.

In 2022, people insured in public health insurance have to pay 382€ every month when being insured with Techniker Krankenkasse. Other German public health insurance companies can charge different premiums ranging from 358€ – 418€ monthly. By switching from an expensive public health insurance company to a cheaper public health insurance company you can save 60€ every month for basically the same coverage.

On top of public health insurance, you also have to pay public care insurance which costs you another 86€ monthly with TK. When being insured in the public health insurance system with TK you would have to pay 468€ monthly for health insurance and care insurance. And as German social security is shared 50/50 with the company you work for, your employer is paying another 468€ every month.

That is 936€ monthly in public health insurance premiums or 11.232€ per year. People claim all the time health insurance in Germany is free. Health insurance is not so free if you have to pay 11.232€ every year for it, is it? 🤔

Premium: Private Health Insurance

While public health insurance premiums can be summed up very easily on your payslip, private health insurance premiums can vary a lot based on coverage, deductible, preconditions, health status, and age you get into the private health insurance system. Based on the filters you set there are more than 200 plans available from more than 30 different private health insurance companies.

Please do not make the mistake and assume that the cheapest private health insurance plan is automatically the worst plan and the most expensive plan is automatically the best one. That is not how the private health insurance system in Germany works because there are many factors that influence your health insurance premium (e.g. deductible or co-payment).

A high deductible will lower your monthly premium as you are sharing at least some of your medical costs with your private health insurance company. Keep in mind though that deductible has to be paid entirely by the insured person and the monthly health insurance premium will be split 50/50 with your employer. So an employee should choose a low or even a 0€ deductible based on the personal health insurance strategy.

When selecting private health insurance with a 0€ deductible and 3 star coverage (public health insurance is 1 star in terms of coverage as it covers only the legal minimum determined by the German Social Code), the monthly premium can be around 494€ consisting of the following components:

  • 386€ for private health insurance (mandatory)
  • 38€ for private care insurance (mandatory)
  • 38€ for seniority savings that keep your premium in retirement as low as possible (mandatory)
  • 32€ for sick leave money (optional) in case you get sick for 6+ weeks (sick, not disabled)
Are you interested to upgrade your German healthcare? Let's find out together which health insurance is best for you.

Deductions: Public Health Insurance

In our example we are comparing a 1 star coverage public health insurance for 936€/month with a 3 star coverage private health insurance for 494€/month. Now let us see the possibilities both German healthcare systems offer how we can decrease both premiums to make healthcare more affordable for you.

The cashback will be a reward that is paid to you by your health insurance company for staying healthy. Very few public health insurance companies pay a cashback. Only 11 out of +100 public health insurance companies pay a cashback as of writing this article. The maximum reimbursement for public health insurance permitted by the German government is 600€/year.

936€/month for public health insurance is costing you only 468€/month as health insurance is paid 50/50 together with your employer. After 50€/month cashback the real premium in the public health insurance system is 418€/month. Please ask your public health insurance for “Beitragsrückerstattung” to get your cashback.

Deductions: Private Health Insurance

While only very few public health insurance companies reward you with a cashback, almost all private health insurance companies pay a cashback (except one health insurance company that claims to be the only English-speaking health insurance in Germany 😉). The cashback amount of private health insurance can be very high, as there is no maximum cashback set by the German government for private health insurance companies (Find the benefits compared here).

To claim your cashback in the private health insurance system all you need to do is to pay for all medical bills yourself instead of sending them to your private health insurance company. This works as long as your medical bills are below your cashback amount. If your medical bills are e.g. 200€ and your annual cashback would be 800€, it is better if you pay the medical bills yourself and net 600€ profit.

The highest cashback we could find after just 1 year of not sending any invoices to your private health insurance company was 2,5 monthly premiums as well as a 600€ fixed cashback. Good news for everyone insured in the private health insurance system: Cashback is always paid including the part of the premium that is paid by your employer.

In our example your private health insurance premium was 494€ monthly, meaning 247€ have to be paid by you (the other 50% by your employer). After deducting 900€/year as well as 2,5 monthly premiums (=965€/year because care insurance, sick leave money & seniority savings pay no cashback), you are left with 92€/month in real premium.

“Public health insurance can charge up to 936€/month while private can be as cheap as 92€/month with a higher quality coverage.”

Conclusion: Is Public Or Private Health Insurance Cheaper?

When comparing public health insurance with private health insurance in Germany, you can see that there is a massive discrepancy in terms of coverage and premium that work both in the favor of private health insurance: 418€/month real premium for 1-star public health insurance vs. 92€/month real premium for 3-star private health insurance.

If you have the freedom to decide freely in which German healthcare system you want to be insured and want to determine together with us which health insurance company & health insurance plan is best for your personal situation, feel free to reach out to secure a free meeting with us. Together we will make sure that you and your family have the best healthcare coverage possible.

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