Health Insurance Options in Germany – 2014

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Overview

Germany has a reputation for having one of the best health care systems in the world, providing its residents with comprehensive health insurance coverage. Approximately 85% of the population are mandatory or voluntary members of the public health scheme while the rest have private health insurance. The health insurance reform of 2007 now requires everyone living in Germany to be insured for at least hospital and out-patient medical treatment. This must also include coverage for pregnancy and certain medical check-ups.

The costs of the German health care system are immense and rising due to demographics as well as medical cost inflation. Recent government reforms have attempted to make hospitals more competitive and thereby reduce costs for the state health insurance providers (Gesetzliche Krankenversicherung or GKV). Reduced benefits for dental work, increased out-of-pocket payments for those seeking treatment and an insurance premium now increased to 8.2% of regular income to be borne by the member alone were measures introduced.

The introduction of the Gesundheitsfonds which is a monstrous collection and distribution fund for all monies paid into the GKV went into effect as of January 1, 2009. The consequences were felt by all: the present 130 Krankenkassen claim that the amounts being distributed per head are not enough to cover costs and a number of the Kassen have already registered for bankruptcy. Their members will, of course, be allowed to change to another Kasse. Krankenkassen are allowed to charge their members an unlimited supplemental premium if they calculate that they cannot meet their expenses. In 2014 none of the public funds has decided yet to demand a supplemental premium but we expect that it will be necessary in 2015. This will again make it necessary to compare the total premiums of the different Kassen before deciding which one to join. Further reforms can be expected in attempting to fund the system and these will probably mean that the premiums will increase and benefits will be further rationed.

You have three options for health insurance while living in Germany; the government-regulated public health insurance system (GKV), private health insurance from a German or international insurance company (PKV) or a combination of the two. You can opt for full private plans if your income is above a certain threshold or if you are self-employed. Finding the best service provider of state health insurance or finding the most suitable coverage from a private health insurer while still at a competitive rate is not always easy but is well worth the effort.

As people have different requirements or expectations from health insurance, it is important to understand the system in order to filter out the most suitable plan while living in Germany.

Health insurance is not a commodity but rather is a vital financial support in times of illness or after an accident. Some health insurance policies offer less coverage than others and the scope and quality of terms and conditions are of utmost importance.

Government Health Insurance System (GKV)

Most German residents (approx. 70 million people) are members of the government health system. If your gross salary is less than 53,550 Euros per year, or 4,463 Euros per month in 2014 then membership in the GKV is mandatory. The government health insurance scheme is administered by approximately 130 Krankenkassen and they must all charge the same basic rate of 15.5 % of your eligible gross salary to a maximum monthly income of 4,050 Euros (2014 figures). If you earn more than this, you do not pay a higher insurance premium. Assuming a maximum monthly premium of 710 Euros as an employee earning at or above the threshold and are therefore as a voluntary member, your contribution is approximately 373 Euros and your employer will pay approximately 338 Euros. The general minimum period of membership with a particular Krankenkasse is 18 months. You can switch government health fund providers by giving two months notice after 18 months membership or if a supplemental premium is demanded or increased.

The medical benefits provided include in-patient (hospital) care as a ward patient with the doctor on duty at your nearest hospital, out-patient care with registered doctors (Kassenärzte) and basic dental care. Please note that there is no coverage for private doctors or surgeons, a private room in hospital, alternative/homeopathic medical care, dental implants, and vision products for adults or any medical benefits outside of Europe. Your non-working dependents living at your address in Germany are presently insured at no additional cost and simply need to be registered with the Krankenkasse.

If you choose to join the German government system, you can register with any of the available Krankenkassen which are non-profit associations administrating the government health scheme. Some (for instance AOK, TK, BEK, DAK) are very large and have millions of members while others (often called BKKs) might have just a few thousand members. This does not mean that the benefits are very different, as all health insurance funds must stick to the government regulations on the minimum they offer. Tip: Claims handling, local convenience and perhaps special programs could be different, but if you ask about the possibility of communicating in the English language you are likely to be disappointed, though a limited number of Kassen employ English speakers.

You and your dependents must also become members of the government long-term nursing care scheme (Pflegepflichtversicherung). This covers some of the cost of meeting personal nursing needs, such as the feeding and bathing of those who become substantially disabled. This presently costs 2.05% or 2.3% of your gross salary (maximum approximately 93 Euros per month if you have no children) of which your employer pays half.

If you would like insurance coverage to supplement the government system benefits, you can purchase a policy from any private health insurance company, German or international; for instance if you would like access to and reimbursement of costs for a private doctor and a private room in hospital, homeopathy and other alternative treatment or higher dental reimbursements. Emergency evacuation from places outside Germany included with a private travel insurance policy should also be considered as these are not paid for by the state health insurance plan and it would be very costly to have to pay for such benefits out of pocket.

Public health insurance funds sometimes offer supplemental insurance plans from a particular provider, offering a group rebate. Such tied plans are not always ideal as you have a wider choice of benefits on the private health insurance market.

Private Health Insurance (PKV)

Generally, private health plans cover a wider choice of medical and dental treatment and provide broad geographical coverage. By having private health insurance you are considered a private patient and can expect more service from the medical profession. The hospitals and doctors depend to a certain extent on private patients to supplement their incomes and therefore welcome them. A private patient can also request and will often get, doctors who speak their native language. The private medical insurance market is served by about 40 German insurance companies, and there are premium/benefit combinations available to suit most budgets. Per person cost of full medical insurance is based on the level of benefits chosen, as well as on entry age and any pre-existing medical conditions. A major portion of your medical insurance premiums has also been tax deductible from German income taxes since 2010.

The government insurance premium covers you and all your non-working dependents, whereas the private medical insurance premium is generally paid for each person covered. You can reduce the monthly cost of your private insurance by agreeing to a deductible (also known as an excess or franchise). German private health insurance companies are not allowed to cancel your policy if you submit claims and are also required to put 10% of your premiums aside as a provision towards keeping the cost stable when you retire.

If you are considering purchasing an expatriate health insurance as a substitute for the government scheme, this could be quite stressful because most of the foreign insurance companies are not registered with the “BaFin” to do business in Germany. Even those that are, find their health insurance plans do not meet the standards set in the new reforms. The crux is that the German government insists that there may be no set upper limits on reimbursement levels and there may be no annual out-of-pocket deductibles higher than 5,000 Euros. Other issues involve how the insurance premiums are calculated. The present situation is that none of the major international expatriate health insurers will provide a German language certificate recognized by all visa authorities in Germany. Whether or not this will change depends on the Germans fully recognizing European directives for cross-border selling of health insurance for non-Germans seeking a residence permit.

Be careful to avoid limited-term policies with no requirement for medical underwriting. These policies very rarely offer a permanent extension and do not cover pre-existing conditions. If you decide to stay longer than the limited contractual term (anywhere from one to five years) and the health insurance contract expires, it could be both difficult and much more expensive to get new health coverage at that point. In addition, even though you may have purchased such a plan from a German health insurance company upon arrival in Germany, it may not be recognized by the visa authorities and you will be forced to purchase a permanent health insurance plan in order to be permitted to stay.

Additional information for employees

You may choose private health insurance (Private Krankenversicherung or PKV) instead of the government health plan if your gross salary is higher than 53,550 Euros per year (2014 figures). Self-employed persons, German civil servants and those persons working part-time and earning less than 450 Euros per month are also eligible.

If you are presently in the German public scheme and earn more than 53,550 Euros per year, you can change to private health insurance with two months’ notice because you are no longer a mandatory member of the German public scheme (GKV); you are allowed to either stay in the public system as a voluntary member or cancel your membership and arrange for a private health insurance.

If upon arrival in Germany you wish to be privately insured, you will need to inform your company's human resources department promptly to avoid possible confusion; otherwise, you may find yourself automatically registered in the government system.

If you purchase a private medical insurance plan from a German health insurance company that provides a certificate recognized by the German government (Paragraph 257 SGB V Arbeitgeberbescheinigung) you may take advantage of the same employer subsidies as a government plan member. This translates to approximately 296 Euros per month of employer subsidy towards the cost of your private health insurance policy and 50% of the premiums paid for your private nursing care insurance. If such certification is not provided, your employer has the option, but is under no obligation, to compensate you for part of the cost of your medical insurance. Most German employers now demand this certificate as proof that your insurance benefits meet the regulations.

Additional information for the self-employed or non-employed persons

It is now illegal to be uninsured.

German private health insurance companies are now forced to accept all applicants, irrespective of their health situation, in their “Basistarif” which became available from January 1, 2009. In other words, if you have a serious pre-existing medical condition and cannot be accepted into normal private health insurance tariffs, you can purchase this tariff as a last resort. It offers similar benefits to the government system and the cost is capped at the maximum rate of the Krankenkasse. Unfortunately this monthly premium is approx. 710 Euros per month for each adult and approx. 300 Euros per dependent child. You can apply for welfare support if you cannot afford to pay these amounts.

If on the other hand you are basically in good health, you should try to purchase suitable benefits plans from a German private health insurance company willing to accept non-Germans. A qualified insurance broker specializing in expatriates should be consulted.

If you are self-employed and were already covered by an international insurer before the cut-off date of April 1, 2007, you should check to make sure your coverage is suitable for living in Germany. You will probably need to prove that your insurance is still in force and provide some certification in the German language to the visa authorities.

If you would like to keep the non-German insurance, please note that you must in any event still pay into the government long-term nursing care scheme (Pflegepflichtversicherung) and may also wish to purchase supplemental sick pay insurance. This may be difficult to find as German insurers are not particularly keen on insuring self-employed foreigners.

Sick Pay Insurance

Should you fall ill while in Germany, your employer will normally pay six weeks' full salary, after which the government scheme health insurer (Krankenkasse) pays a percentage of your income, (up to approximately 2,835 Euros per month) as statutory sick pay (Krankengeld) for up to a maximum of 78 weeks. After deduction of taxes you would be left with approximately 2,253 Euros.

If you are earning more than this per month, it would be worth considering the purchase of supplemental sick pay insurance, which is available at reasonable rates. This is particularly important if your monthly fixed living costs are higher than 2,253 Euros. If you purchase private medical insurance, you should also consider purchasing adequate sick pay insurance. Please note that neither sick pay insurance nor the government scheme covers permanent disability and it is assumed that you will be returning to full employment. You should therefore consider purchasing a separate policy for permanent disability and critical illness.

Cross-Border Care, Travel Insurance and Evacuation Benefits

The German public health insurance system will provide you with limited medical and dental cover for travel within the EU. Starting on October 25, 2013 the EU cross-border regulations came into effect. This change means that public patients can choose to have their medical care in any country in the EU, EEA state or Switzerland and receive a partial reimbursement from their local public insurance fund (i.e. Krankenkasse in Germany). As there are different procedures for hospital and out-patient services please contact your Krankenkasse before embarking on any cross-border medical or dental care. The contact number for the international liaison office: +49 (0)2289530-800.

A large percentage of foreign doctors will handle you only as a private patient. You will be reimbursed for the amount that the German system would have paid for the treatment - sometimes only a fraction of the actual cost you paid. If you wish to be covered for the full amount of any medical outlay or plan to travel to non-EU countries, you should definitely purchase a travel insurance policy. There are single trip and annual policies to choose from. The German government health system does not cover medical evacuation from any foreign countries. Please note that not all travel insurance policies cover evacuations, so always check the fine print before signing up.

Dental Care

In Germany, dental care can be expensive. For major dental work involving bridges, crowns or orthodontics, you must get a cost estimate and present it to your insurer prior to treatment; otherwise you could be faced with a very high bill to be paid out of your own pocket. If you have doubts about a recommended treatment, get a second opinion. Also please watch out: German dentists can sometimes suggest complicated and unnecessary dental work. The reimbursement amounts are calculated based on a fixed price depending on the case and you can expect to pay between 30% and 80% out-of-pocket for dental work if you do not have supplemental dental insurance.

The fixed price system uses the absolute minimum standards and does not cover gold, porcelain or other materials. Supplemental dental insurance is worth considering if you would like to avoid unpleasant surprises.

Pharmacies

Germany has an extensive network of pharmacies (Apotheken), with branches on just about every second corner in town, easily recognized by big red “A”. The state health insurance generally provides reimbursement for prescription generic drugs, though with a co-payment, the scale of which depends on the cost of the medication. The public system is trying to reduce the immense cost of pharmaceuticals and has forced discounts from the large drug companies. The pharmacy must search for the lowest possible price for the generic medication when you present a prescription from the registered doctor as a public patient.

If you are privately insured, brand-name medication will be covered, as long as you have a prescription. You will have to pay the full cost of the prescription medicine immediately and then submit the receipts to your insurer for reimbursement. However, do not expect to be reimbursed by either the government or private health insurance for over-the-counter remedies.

Also see our article "Insurance in Germany" for a complete overview of ALL types of insurance in Germany.

Copyright
Cathy J. Matz-Townsend
Independent Insurance Broker
Hainstrasse 2
61476 Kronberg, Germany
Tel: 06173 995020
matz@insure-invest.de
www.insure-invest.de

All information is provided to the best of our knowledge as of January 2014 but we can give no guarantee for its accuracy or completeness.