the German healthcare system

Health insurance for expats in Germany

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First things first

Health insurance is mandatory and legally required in Germany for everybody who enters Germany whatever reason or duration of stay.

The German healthcare system is different from any other model around the world. In Germany, there is statutory health insurance and private health insurance. As an expat, you have to choose between one of the two models.

If you come from another EU-member-state, your European Health Insurance Card (EHIC) usually covers you only for the first three months.

International health insurances do not meet the legally set requirement to become a substitute for German public health insurance. This form is only possible for students, tourists or short-term expatriates, for example.

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Health insurance in Germany

Patrick Ott
Patrick Oliver Ott
Expert for insurance and finance
8. March 2022
citizens - tourists - expats

Is health insurance mandatory in Germany?

The very short answer is simple: Yes!

When entering Germany for whatever purpose or duration you need an adequate medical insurance. Every resident of Germany is obligated to set-up and keep going a full-service health insurance, either a state (public) one or a private health insurance.

This is the law in Germany since 2007 (Section 5 Subsection 1 No. 13 of the SGB V) and 2009 (for private health insurances according to Section 193 Subsection 3 of the VVG) and has been extended thru several amendments to the relevant laws in 2011, 2013 and so on.

There are also countless court decisions underlining and strengthening this. Thus, it is safe to say: the legal requirement to obtain and hold a compliant health insurance while residing in Germany is well established legally in Germany for more than a decade by now.

Good to know: if you come from another EU-member-state, your European Health Insurance Card (EHIC) usually covers you only for the first three months. Once you register your residence in Germany for good, you need German recognized health insurance.

Working in Germany: how to get health insurance?

Now, if health insurance is mandatory in Germany, it should be simple to find one and set it up, right? Afterall, if the government puts you under an obligation, it must also make sure that you can fulfill it, one would think. But, sadly enough, this is not always the case.

Some people working in Germany, especially employees, will get fairly easy into a legally adequate health insurance when moving to Germany. Others, mainly self-employed and freelancer will find it quite a challenge.

One of the reasons that the German health insurance system is so hard to navigate is, that the system is basically unique in the world. Only Chile in South America has a similar system. The German system is not compatible with the rest of the world. Germany has a great social security system, but it is rather constructed as if Germany was an island.

Why the German health care system is so different?

The German system is so unique because of there are two different types of health insurance side by side:

1. Public or state health insurance
2. Private health insurance

Only in Germany the private health insurance is a full substitute of the state health insurances. You leave the public health insurance system when you take fully comprehensive private health insurance. In most other countries you just put better private health insurance on top of more or less adequate state or national health insurances coverage. Not so in Germany.

Good to know: Once you opted out of the public health insurances in order to set up private health insurance, the way back can be hard or even impossible. That is not a myth as some may claim but the sad truth experienced by so many Expats who received inadequate advice when starting of in Germany.

Therefore, careful planning is important when coming to Germany and selecting your public or private health insurer. It is quite a challenge and you should have an independent and specialized advisor help you picking it.

This is not an area for amateurs or “DIY”. At Chambervelt & Rooselain we have years of experience in advising Expats coming to Germany.

German healthcare system: the most important basics

The statutory health insurance is the basis of health care in Germany. In principle, every employee is insured under this model. The benefits of the statutory health insurance are regulated by law and are the same for all public health insurance companies. This corresponds to approximately 95 percent of the health insurance benefits.

In addition to the legally defined benefits, public health insurance companies offer voluntary supplementary benefits. These differ between the various health insurance companies. The insurance premium is based on one's gross income, of which a fixed percentage is paid to the health insurance company.

In the case of private health insurance, the scope of benefits depends on the respective insurance tariff. The policyholder is free to decide whether he or she wants basic coverage or comprehensive premium coverage. The insurance premium depends on the tariff and the selected benefits. Private health insurance therefore differs very significantly from one another in terms of price and coverage.
German healthcare system- The most important basics

Who can be in which system?

Not everyone has a free choice between statutory and private health insurance. There are fixed rules as to who is allowed to choose at all. Two aspects play a relevant role: gross income and employment relationship.

  • Employees with an annual salary of up to € 64,350 are compulsorily insured in the statutory health insurance
  • Employees with an annual salary of more than €64,350 can be exempted from statutory health insurance and switch to private health insurance
  • Self-employed and freelancers can choose private health insurance regardless of their income

Comparisson of private and state health insurance

German Private Health Insurance

German Public Health Insurance

Availibility

Employees with an income above €62,500 per year, freelancers and civil servants can take out private insurance

Regardless of income, everyone is insured through the german public health insurance system

Cost

Cost vary depending on age, coverage and any pre-existing conditions

Cost depends on your income

Familiy

Family members are not automatically covered. However, they can be additionally insured for a fee

Children and non-working spouses are covered free of charge

Private hospital rooms

Private hospital rooms can be additionally insured

Private hospital rooms are not covered by the statutory health insurance

Pre-existing conditions

People with pre-existing conditions often have to expect higher monthly contributions

Even with pre-existing conditions you are insured without surcharge

Deductible

The deductible depends on the respective insurance tariff

The deductible is € 10 per quarter. The contribution is forfeited if you have not had any doctor's visits in a quarterly year

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Living and working in Germany as an employee

Coming to Germany as an employee under German laws and regulations, it is fairly simple. If your gross salary is below a certain amount, you will be signed up with a public health insurance.

The relevant amount for your gross salary changes almost every year. For 2022 you are obliged to have a public health insurance, if your gross salary is below 64.350 Euro (Versicherungspflichtgrenze GKV / compulsory insurance limit health insurance).

Even if you are obliged to choose public health insurance, you have lots of options. There is a large number of public health insurances in Germany. Their coverage is decided by law within the Social Code V health insurance (Sozialgesetzbuch V Krankenversicherung). Hence, around 95 percent of coverage is basically the same with all state insurances. They may differ only in:

1. Additional premium (Zusatzbeitrag)

In order to allow for different financial situations and performance of public health insurances, the law allows them to set additional premiums on top of the standard premium that is equal for all. The standard premium in 2020 is set at 14.6 % of your monthly gross salary but with a cap at € 58,050 gross salary per year. It means the max costs you’ll have to pay for public health insurance in Germany is in 2022 set at € 769.16 per month at the standard premium.

However, since public insurances are allowed to add to this 14.6 % standard premium, you’ll find a wide range of additional premiums set at +0.3 % to max. +2.4 %. On average across the board the additional premium is +1.3 %. Advice on getting a good public health insurance with low additional premium can save you up to € 600 in premium costs per year.

2. Additional coverage (Zusatzleistung)

In order to differentiate rather by quality than by price alone, some public health insurance offer additional coverage above and beyond what is required by law. This can include alternative healing/natural healing, improved dental coverage or increased coverage for dental care and dental replacements as well as better coverage for health check-ups or infertility treatments.

Good advice from a health insurance expert knowing the complex diversity on the market can help you find the best public health insurance solution for you.

3. Bonus programs and pay-backs

Last but not least, some public insurance offer some bonus-programs where you’ll receive some pay-backs annually if you live healthy (and show proof of that). For instance thru adhering to a regular check-up schedule etc. Others offer pay-backs if you have not used/needed your health insurance for an entire year at all.

Whether this is of interest for you obviously depends on your personal priorities as well as by your life style. Hence a good advice process can be crucial here.
Additionally you can improve the coverage of the public health insurance with private add-ons like a private dental insurance or other private add-ons such as improved hospital care or access to doctors only offering services to privately insured patients. And in-depth analysis of your own wishes and priorities combined with a thorough check across the market for fitting add-on insurance plans is therefore strongly recommended.

Private health insurance as an employee with gross salary above € 64,350 p.a.

If your gross salary exceeds that particular amount (€ 64,350 in 2022), you have the right to opt out from public health insurance and join a private health insurer of your choice. Please mind: you just have the right, not the obligation. You may also decide for a statutory insurance.

Private health insurance can be quite attractive financially on the short term. And often, though not always, the private system provides superior health insurance coverage.

But the decision to use a private health insurance in lieu of public health insurance is basically a one-way-road: you can’t turn around and change your decision later simply by you saying so. If you switch to private - you stay there. Thta's the rule.

There are ways, at least til age 55, to return to public health insurance but it is never simple. Anyone who tells you different is just trying to sell you a private health insurance for THEIR own best interest (commission) and not your’ s.

To sum up: employees have it simple and only those with higher yearly income may face a not so easy decision between public and private health insurance.

Living and working in Germany as self-employed or freelancer

If you come to Germany as a self-employed or freelancer it is somewhat different and more complex. First of all: while for employees the employer pays half of the health insurance contributions (up to a point), as a self-employed you have to pay the full costs for your health insurance premiums (of course, tax deductible in major parts). It doesn’t matter if private or state insurance.

Can self-employed and freelancers join a public health insurance?

Yes, it is possible to join a public health insurance as a self-employed or freelancer.

But, only if you have been either in a German public health insurance or an EU-memberstate’s national health insurance/state health insurance for the preceding 12 months or at least 24 months total out of the last 5 years. In this case you may join the public health insurance.

This is true for both EU citizens or Expats with a passport from outside the EU. Even EU citizens who have lived more than 5 years outside the EU and hence did not have health insurance coverage from an EU member state cannot apply for German public health insurance. Your application with any German public health insurance will be rejected due to ineligibility to join.

This situation can be bad if you have a large family coming with you or if you or family members have certain medical conditions. Especially in those situations you should check all the options getting into a state health insurance. If you have any questions about that or if you need assistance, do not hesitate to give us a call or send us an email.

Private health insurance for self-employed and freelancers

Most self-employed or freelancers must go or decide for private health insurance. There is a large number of different insurance companies available, each offering also a range of different insurance plans from basic to all-inclusive.

In contrast to the public health insurance, there is a wider range of differences between them as well regarding monthly premiums (which are NOT calculated based on your income but based on your age and health status) and the quality of coverage.

Therefore, the search for and selection of a good health insurance for you and the family should be based on your own wishes and priorities. Those aspects should be include in your thoughts:
Current premiums and financial stability of the insurance plan or insurance company per se.
The complete range of coverage in comparison to the market and competition.
Health insurance plan details for coverage, track record for claim approval and settlement etc.
Admission guide-lines and requirements. A number of German private health insurances will accept foreigners who newly arrived to Germany only after a stay of at least 2 years in Germany, for instance.

Additional Roadblock when looking for private health insurance coverage in Germany

However, there is yet another challange with private insurances: since 2009 the German private health insurances are not allowed to cancel a health insurance contract even if you stop paying your monthly contributions. To make matters worse for the insurance companies, they even have to keep up an emergency coverage for you.

This situation is good for you, as soon as you are a member in any of the insurance companies. For the companies it is quite bad. At times, more than 150.000 people in Germany were unable to meet their financial obligations and thus causing the German insurance companies to miss out on nearly 750 Million EUR in unpaid contributions.

As a consequence, anyone who is considered to be a financial risk is routinely rejected when applying for a private German health insurance. And if you come freshly to Germany, you are often considered a financial risk because there is no German credit or income history for you. And your credit history from home does not count.

Therefore, the number of German private health insurance that will accept a self-employed or freelancing person who just arrived in Germany is rather limited. It requires a lot of solid preparation for presenting your financial background, too.

Use professional advise: The German healthcare system is quite complex. In particular, applying for private health insurance for expats requires a lot of experience. You should not take this step without an experienced advisor.

International health insurance instead of German healthcare system?

Expats often select international health insurance which they have used already elsewhere in the world or know about. Applications with them are usually fairly simple. And among those international health insurances there are some pretty good ones, granted.

But they do not meet the legally set requirement to become a substitute for German public health insurance. If somebody tells you differently, have them sign a guarantee to cover your cost and back charges in the future if you need to switch to German health insurances. Because that’s what is going to happen: as soon as the systems finds out your inadequate insurance, they will back-charge.

How do they find out? For example, you need to join a German health insurance because you’ll take on employment. At this moment the German insurance has to check how you were insured in Germany before. Failure to show proof of legally accepted and adequate health insurance coverage will lead to back-charges of the contributions for up to five years. Depending on how long you already live in Germany.

There are ways to solve this problem. But they require in-depth knowledge and knowhow from someone who is specialized in this kind of Expat advice.

In which case is the international health insurance compliant under German laws?

International insurances are only good for folks sent to Germany by their employers in the form of secondment. Or for folks with a clearly and transparently defined short time-span for staying in Germany. Expat insurance may also be sufficient for students and academics who come to Germany on a short-termed project.

If you don’t belong to either group, you’ll need to have either a public German or private German health insurance. Should you have selected something else in the past and require a solution, we offer a special German private health insurance tariff with ASEIG that can help you avoid the back-charged. Just ask for our advice for this.

To sum up, international health insurance or expat insurance works for:
  • Students or academics
  • Employees on secondment
  • Short-term stays in Germany
  • Tourists

FAQ about the German healthcare system

Is private or state health insurance better?

It would be too easy if this question could be answered with a clear private or statutory. it always depends on the individual case examination. That is why choosing the right health insurance is one of the most difficult decisions in the insurance sector.

Of course, only if the choice is possible at all. Employees up to the assessment ceiling must be insured in the statutory health insurance scheme.

Is international health insurance or expat insurance enough?

It depends. For students, tourists or employees who only work in Germany for a short time, such insurance is sufficient. Expat insurance is also suitable for the first three months after arrival. For employees and self-employed persons living permanently in Germany, private or statutory health insurance is mandatory.

What does health insurance in Germany cost?

As an employee in the statutory health insurance scheme, the insurance contribution depends on the gross salary and is 14.6% plus an additional contribution of between 0.3 and 2.4%. In private health insurance, the insurance contribution depends on the benefits chosen, the age at entry and the state of health.

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