Which health insurance is best for me?
Travel health insurance, public health insurance, or private health insurance. Germany has many different health insurances. Which health insurance is best for you? 🤔
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Introduction: Health care insurance in Germany
The German healthcare system offers many different types of health insurance, giving you a large number of choices when thinking about which health insurance is best: Public health insurance (gesetzliche Krankenversicherung), private health insurance (private Krankenversicherung), and travel health insurance (Reisekrankenversicherung). There are also many misconceptions when it comes to these health insurances in Germany – we are here to show you which health insurance is best for your needs.
In this article, we will compare private vs. public health insurance and examine which health insurance is best. Therefore, you will find out how much public health insurance & private health insurance are charging you and which health insurance is best with regard to cost We will also look at which health insurance is best regarding coverage. And also which health insurance is best for you overall. As health insurance in Germany is mandatory by law, you have to be a member of either public or private health insurance.
Which insurance is best when coming to Germany for just a couple of months (e.g. as a student)? In this case, travel insurance for Germany might be sufficient, but as soon as you decide to stay in Germany for a longer period it is time to get proper public or private health insurance. This systemic decision has far-reaching effects on you and which health insurance is best for you, as you will find out in this article.
When thinking about which health insurance is best, it is important only employees earning more than 64.350€ gross salary in 2022 have the freedom to choose which health insurance is best for them and which system they want to belong to. Employees earning less than that threshold are forced by the government to be a member of public health insurance. Self-employed people, freelancers, and business owners can always choose for themselves which health insurance is best.
Which health insurance is best with regards to Coverage? Public health insurance vs private health insurance
When asking yourself which health insurance is best, you need to keep in mind that Germany has around 100 different public health insurance companies that have all basically the same kind of coverage and benefits. There are minor differences between different public health insurances but as the minimum coverage is mandated by the German social security law, all public health insurances have 95% of the same coverage, making it difficult to say which health insurance is best among the public health insurances.
The big problem with the coverage of public health insurance is that the German government continuously decreases the coverage while increasing the premium at the same time. Over the last years, members of the public health insurance have been forced to pay for their own medication, their glasses, their own dental treatments, etc.
Why would government employees decrease the coverage for their own health insurance? They don’t. Almost all government employees in Germany are a member of private health insurance.
In the private health insurance system, all benefits and coverage are guaranteed from the moment you sign the contract. Therefore, they cannot be decreased. As long as members of the private health insurance fulfill their contractual obligation of paying their health insurance premium, the private health insurance company will fulfill its obligation of guaranteeing your coverage.
Members of the German private health insurance system can also choose the coverage they want themselves, which is something you should consider when thinking about which health insurance is best. The coverage of private health insurance has to be at least as good as the public health insurance. Beyond that, it can also be a lot better. The higher the benefits, the higher the insurance premium of course.
Still: Is there any measure when judging which health insurance is best? Generally speaking, the benefits of the German healthcare system can be measured in stars from 1 to 5 like hotels (1 star: Motel & 5 stars: Luxury resort). As the coverage of public health insurance is the minimum by German social security law, it is considered 1 star. Benefits of the private insurance have to be at least 1 star, but can be as high as 5 stars, giving some info as to which health insurance is best.
If members of the public health insurance system want to upgrade their coverage from the 1-star level, they can get certain additive insurances like dental additive, hospital additive, or ambulant additive to close the gap and come close to the multiple-star level of the private health insurance.
Which health insurance is best with regards to cost? Public health insurance vs private health insurance
Members of the public health insurance have to pay 14,6% of their income as a premium. Depending on your public health insurance status (voluntary member or forced member) you will pay 14,6% of your gross salary, dividends or interest that you get, the rental income you generate from real estate, and all other types of income.
On top of that 14,6% every public health insurance company charges an additional contribution that ranges from 0,3% to 1,5% depending on the efficiency of the public health insurance company. The public health insurances are ranked by premium including the additional contribution that they charge here.
On the positive side:
- The maximum gross salary, where you have to pay 14,6% for public health insurance premium, is 56.250€ in 2022
- If Spouses and children have no income, they will be insured for free in the public health insurance
When deciding on which health insurance is best, it is also important to note that members of public health insurance that pay a high premium do not get better coverage or additional benefits. So cost alone does not predict which health insurance is best. Everyone in the public healthcare sector is receiving the same amount of coverage. This is independent of the amount they contribute with their premium (like taxation you don’t get more benefits because you contribute more). So your income has huge implications for which health insurance is best for you.
The premium of private health insurance is always calculated individually and not bound to income. Generally speaking, the higher the coverage, the higher is also the premium of private health insurance. Cost is important when deciding which health insurance is best. Aside from the coverage, there are also other factors that influence the private health insurance premium and thus which health insurance is best suited for you:
- Age: The younger you get into private health insurance, the cheaper the premium will be
- Health: The healthier you are, the more you will benefit from a lower premium (ie. no risk surcharge)
- Deductible: If you are willing to pay some of the doctor invoices yourself, you will pay less in premium
That is why for people with a high income, the question of which health insurance is best can be answered definitely: People with a high income will benefit the most from being on private health insurance, especially when they are young and healthy. No matter if you are in the public or private healthcare sector, your employer will always pay 50% of your premium as part of the employer’s social security contribution.
Which health insurance is best? Top 3 Private Health Insurance Myths
When thinking about which health insurance is best, note that there are many myths and straight-up lies surrounding the private health insurance system. Many of these “alternative facts” come from friends, neighbors, public health insurance salesmen, and colleagues that are spreading random facts they heard somewhere and believe they are true. Hardly anybody is looking at the German law or objectively true facts when looking at which health insurance is best.
Myth #1 is of course that private health insurance is cheap when you are young and very expensive when you are old. People tend to believe that your private health insurance premium will be adjusted from year to year because the insured person gets older. This is as wrong as it gets and leads to many mistakes when deciding on which health insurance is best.
It is true that the premium of private health insurance can be very cheap when you are young and healthy, a lot cheaper than the premium of public health insurance when you have a relatively high income (+65.000€ gross salary). For these people, it is obvious which health insurance is best. So everyone who is planning to work in Germany for just a couple of years and leave again can benefit a lot by switching to the private healthcare sector.
It is not true that private health insurance companies will raise your premium because you get older, which is important information when deciding which health insurance is best. Still, both public and private health insurance will become more expensive over time. This happens with the rising costs of medical treatment and inflation. A study from the independent research institute IGES indicates the following changes in health insurance premiums:
- 1995 – 2015: 2,6% rise per year in public health insurance vs 3,3% in private health insurance
- 2005 – 2015: 3,7% rise per year in public health insurance vs 2,2% in private health insurance
What does this mean for the question of which health insurance is best? Both healthcare systems in Germany get more expensive over time that is certain. When looking at the demographic change in Germany one can only guess that public health insurance will get a lot more expensive than private health insurance in the future as the German population is getting older and older.
As every member of the private healthcare system is saving at least 10% of his premium for retirement, private health insurance premiums tend to be a lot more stable in old age than the public health insurance premium that is based solely on your income and your financial situation in retirement, which is something to keep in mind when deciding on which health insurance is best.
While one can argue that private health insurance myth #1 might be true, German law clearly indicates that myth #2 is a straight-up lie: Once a member of the private health insurance system, you will always be a member of the private health insurance system.
There are just many rules when it comes to healthcare in Germany because the government wants to prevent people from switching back and forth all the time. So if one does not meet the criteria to choose freely which health insurance is best and which system he wants to belong to, there is no way to get out of public health insurance.
If one has changed their mind about which health insurance is best and wants to leave the private healthcare system again, just talk to your employer that you want to use your legal right for Brückenteilzeit according to §9a TzBfG which means that you want to work temporarily part-time. With part-time you will most likely earn below the threshold. Therefore you will automatically forced to be a member of the public health insurance again.
The real question, tied to the question of which health insurance is best, is: Why would anybody want to go back to public health insurance after enjoying the benefits of private health insurance? You will fall back from your premium coverage to the 1-star coverage level of public health insurance. Also, you will lose all the seniority savings that you built over the time you have been insured in private health insurance. Perhaps not the wisest move when thinking about which health insurance is best.
Myth #3 of private health insurance is that spouses and kids are especially expensive because they have to be insured individually. Do not be fooled by this myth when thinking about which health insurance is best. It is true that family members with no income are insured in the public healthcare system for free, but as soon as both adults are working, both will pay 14,6% + additional contribution for public health insurance.
Which health insurance is best for a family then? A family where both adults are working with high income will most likely pay more in public than private. If only one adult is working while being insured in the private health insurance, the other adult will have to stay in public health insurance because he doesn’t meet the requirements to also switch to private health insurance.
As children in Germany are always insured by the highest-earning parent, you cannot choose which health insurance is best for your kids if both parents are members of different health insurance systems. If the highest-earning parent is a member of the private health insurance, kids will also be insured privately, another thing to keep in mind when deciding on which health insurance is best. The premium is usually around 100€ – 150€ per month and is being split 50/50 with the company you work for.
Conclusion: Which health insurance is best for me?
Since health insurance in Germany is mandatory, it is very important to think about which health insurance is best. Because of the strict rules, about 90% of the German population is forced into the public health insurance system. Employees earning +64.350€ gross salary or self-employed people can choose freely which health insurance is best for them and which system they want to belong to (public or private health insurance).
The question of which health insurance is best is a complicated question that can only be answered on an individual level. You probably do not want to rely on friends that spread myths, or insurance salesmen that want to sell you either public health insurance or private health insurance (whoever they are associated with) – these will not be interested in which health insurance is best for you, but in selling for whoever they are affiliated with.
These are therefore not the right people to discuss which health insurance is best. Feel free to secure a free meeting with us if you would like to discuss your individual health insurance needs & requirements with us here. We can then figure out together which health insurance is best for you.