It’s one of the first choices you have to make when moving to Germany. By law, all legal residents must have health insurance coverage. So, we’ve teamed up with James Meads, British expat and Founder of LiveWorkGermany, to look at the options which are available and to whom.
If you are self-employed, then you automatically have the option of whether to pay into the public health system (gesetzliche Krankenversicherung) or whether to opt out and take a private health insurance policy (Private Krankenversicherung).
Employees don’t automatically have this choice: It depends on how much you earn. In 2017, as an employee, you have to earn over €57,600 gross per annum to have the choice. Anyone earning below this threshold is automatically obliged to go with public insurance.
For employees, you will have to advise your employer during the first month on the job which health insurance you have taken, and produce a letter from your provider confirming your monthly bill. This is because regardless of which option you take, your employer is obliged to pay a contribution towards your healthcare costs and therefore need to know how much to deduct, or contribute to, your first payslip.
Choosing Public Insurance
If you choose public insurance, this is calculated at 14.6% of your gross monthly salary. Your employer will contribute half of this sum and you will pay the other half, which is deducted directly from your salary and paid to the public insurance company, known in German as Gesetzliche Krankenkasse or GKV. Additionally, you have the option to purchase extras which are not covered under the normal policy, e.g. physiotherapy and dental care, at an additional cost. This is a voluntary and as such is not subsidized by the employer.
There are many gesetzliche Krankenkassen, each one with their own specific advantages or disadvantages depending on what an individual is specifically looking for. Do your homework and use a comparison website such as Check 24.
Going private means that the cost of the policy is determined by a number of factors pertaining to how risky you are perceived to be to insure. It could be considerably cheaper or more expensive than public insurance, depending on your individual circumstances.
Choosing Private Insurance
Opting for private insurance (PKV) means that your employer will provide a contribution towards your policy. You will receive the employer’s contribution (typically 50% of the monthly policy, with a few exceptions) directly on your payslip as part of your monthly salary. You are then directly responsible to pay for your health insurance costs.
So, if you have the choice available to you, should you go public or private?
A younger person, single, in good health, with no pre-existing conditions, and with no dependent family members is better off going private in most cases. Public insurance, calculated as a percentage of their income, would almost definitely be more expensive. This applies to both freelancers and employees. The only difference is employees don’t automatically have the choice.
Public insurance, calculated as a percentage of their income, would almost definitely be more expensive. This applies to both freelancers and employees. The only difference is employees don’t automatically have the choice.
If that same person were somewhat older, married with kids, with a view to reside in Germany permanently, then a whole new set of factors come into play. A private health insurance company would consider them to be a higher risk. They also have kids who have to be insured on the policy. And they can’t just easily jump on a plane home if the costs become unaffordable in the same way that a single person could. In this case, public insurance would probably make more sense.
You cannot simply opt into the public system when a private insurance company jacks up the cost of the insurance policy. Otherwise, everyone smart enough would do it. There is a grace period but then after that, you can’t opt back in.
Since 2013, EU law states that insurers may not discriminate between male and female insurance policies. Therefore the two examples I used above are not gender-specific.
This is a summarized version of a longer article published on LiveWorkGermany, where you can read the full version. Do you have questions about living #LifeInDüsseldorf? Feel free to send us an email with your question at firstname.lastname@example.org. If you have tips you’d like to share with others, we’re also accepting guest posts which include the author’s name, bio and photo.