Private and statutory health insurance compared

Should you stick with statutory health insurance or go private? Here’s all you need to know about the two systems

Article

4 minute read

2022-08-30

German health insurance can be really confusing. How can you tell whether statutory health insurance is the right choice? Could it be worthwhile to switch to a private health insurance plan? We explain the pros and cons of both so you can easily find out which system is the one for you.

PHI and SHI: What are the differences?

Statutory and private health insurance could not be more different. Statutory health insurance is based on the solidarity principle: the healthy pay for the sick. So no matter how much you earn, everyone gets the same treatment. Your monthly premium, however, solely depends on your financial capacity. Your health has nothing to do with it. If you earn more, you automatically pay higher premiums.

In return, you get the same benefits as those who pay less. The range of services provided by the SHI system is fixed by law and is therefore the same for all health insurance funds. They only have a limited amount of leeway – for example, with regard to certain additional services.

The situation is different in private health insurance. PHI works according to the equivalence principle. This means that premiums are calculated according to your individual risk factors and are not dependent on your income. You only pay for your own coverage. Factors such as your age, state of health and the tariff you choose determine the amount of your monthly premium.

What about benefits? Well, the sky is the limit. You’re offered the crème de la crème of medical services. Since you choose according to what you need, you also have an influence on the amount of the premium.

Who are PHI and SHI aimed at?

You can assess whether GKV or PKV is more suitable for you on the basis of your income. If your gross annual income is less than 64,350 euros, you must take out statutory insurance. If it is more than this and you meet a few other conditions, you can switch to private health insurance. In this article, you will learn more about the entry requirements and which occupational groups are best suited to private health insurance.

What are the advantages and disadvantages of statutory health insurance?

Advantages:

Statutory health insurers generally accept everyone, regardless of age, pre-existing conditions or current state of health. Families have the option of taking out joint insurance (family insurance).

Another advantage of SHI is that contributions are linked to income. If you earn less, your contributions will also decrease.

Disadvantages:

Flexibility, goodbye! People with statutory health insurance cannot adapt their cover to their individual needs. Benefits and contributions are prescribed by the GKV, so you can only choose your health insurance fund. In addition, the scope of benefits and the amount of additional payments can change at any time. There is also little choice in the choice of doctors and treatments. In SHI, you get standard benefits and usually have to pay extra for aids such as visual and hearing aids and dentures.

What are the advantages and disadvantages of private health insurance?

Advantages:

Hello, private patient status! In private health insurance, you have access to far more benefits than in statutory health insurance. Here is a list of the privileges of privately insured persons:

  • Guaranteed benefits: You get what you choose. All the benefits you were promised in your contract are guaranteed and there are no changes or exclusions. Not now and not in the future.
  • Optional benefits: You are spoilt for choice and can choose whether, for example, you want to be treated by the chief physician or treat yourself to the luxury of a single room in the clinic.
  • Lower premiums: The earlier you start paying into private health insurance, the better. As long as you're young and healthy, a portion of the premium is saved so that you can still have affordable premiums later on when you need more medical support.
  • Fast and exclusive treatments: Shorter waiting times, quicker appointments and comprehensive check-ups – a lot of things are easier here.
  • Retirement provisions: PKV builds up reserves for you today so that your premiums do not rise sharply in old age.
  • Premium refund: You are rarely ill and have not used any outpatient or dental treatments? Then you get money back at the end of the year!

Disadvantages:

In addition to advantages, private health insurance also has disadvantages that you should be aware of:

  • No family insurance: With private health insurance, each insured person has their own tariff, which depends on their state of health and age.
  • Child insurance only against contribution: Children can be co-insured, but a contribution is due for each child. They are insured with the parent who has the higher income.

What premiums should I expect with both types?

Depending on your age, state of health and occupational group, you’ll have to pay a different premium. To give you an approximate overview, we have prepared a sample case for you. We assume that the insured person is 30 years old. All figures are only indicative.

The table shows your share of the contribution after deduction of the employer’s contribution, which is half of the contribution for salaried employees in both systems. Voluntarily insured persons (self-employed, civil servants and freelancers) have to pay the entire contribution themselves. Privately insured civil servants receive a subsidy instead of the employer’s allowance.

When and how can I switch from statutory to private health insurance?

If you meet the conditions for private health insurance, you can apply for a change at any time. Please note that the GKV has a notice period of three months. The only exception: If you become self-employed overnight, you can switch immediately.

Would you like support in switching? Just get in touch with us! We are here for you.

What do I get out of a Getsafe consultation?

In one word: clarity. We’ll go through your situation together, assess your personal needs and advise you in detail on private health insurance. We’ll recommend suitable tariffs and take time to answer your questions. You’ll be smarter afterwards!

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Author: Getsafe