Health insurance in Germany: Why do people go private?

The public versus private health insurance divide in Germany can be a source of confusion for expats. In this article, the independent financial consultancy Horbach Expats covers all the basics you need to be aware of. 

Health insurance is one of the most basic types of insurance for anyone residing in Germany. Regardless of your occupation status, age, or previous insurance status, you are legally compelled to be insured through one of the many providers available. 

There are many different health insurance providers in Germany, but they are not all exactly the same. Broadly, they can be classified into two different groups: statutory healthcare and private healthcare. But not everybody has the right to choose which type of coverage they get. 

Why do people choose to go private?

The main reason people choose to go private is the better coverage it provides, given that the statutory system is no longer in the best shape. Private health insurance allows you to opt into certain insurances - such as additional dental care, alternative medicine, or direct access to specialists - which are not (or no longer) covered by statutory health insurance. 

In a worldwide comparison, Germany’s healthcare system is considered to be solid and reliable. Nevertheless, the decreasing birth rate, higher life expectancy and slow entrance into the workforce are all contributing to a demographic shift that is overburdening the solidarity-based system. 

What this means is that for the last four decades statutory health insurance premiums have been steadily increasing (above the rate of inflation), while the coverage has been progressively cut back. Critics are increasingly saying that the statutory system is neither efficient nor sustainable for the future. 

Aside from this, another reason why someone might opt for private health insurance is that there are potential savings to be made. Rather than taken as a flat rate proportion of your salary, private health insurance contributions are representative of your age, your situation and your preferences - no social principle. Your employer still contributes half of your premiums, so with lower monthly payments, you get more out of your salary. 

Why is everyone not going private, then?

The reason for this is simple: unless you are either self-employed, a student above the age of 30, or an employee earning more than 64.350 euros gross per year, then you are compelled to stay in the statutory system. If you belong to any of these three categories, then you are eligible to go private - as long as you can find a provider willing to insure you. 

Your age and health status are two of the main criteria insurance companies use to decide whether to offer you coverage or not - even if you are eligible on paper. 

How do I know what to choose?  

Your situation and coverage preferences, as well as how long you plan on living in Germany or even your family status, are relevant factors that all contribute to finding the right health insurance plan for you. 

If you want more advice on choosing between public and private health insurance, or have any other questions about healthcare in Germany, get in touch with the Horbach Expats team for a free consultation.