In addition to being home to Lederhosen and Currywurst, Germany is famed for being the European capital of insurance. And while you may be able to skimp on bike or window insurance, there’s one insurance that’s non-negotiable: health insurance.
Thanks to Germany’s world-class healthcare system, you likely won’t need to worry about the quality of your care as an expat. Because health insurance is compulsory, everyone gets access to high-quality healthcare, no matter how much they earn or what their medical history is.
There are two insurance systems expats can choose between in Germany: public health insurance and private health insurance. So, which is better? The answer depends on many factors, such as your income, age, and family situation.
In this guide, we’ll explain the differences between the two systems, the pros and cons for each, and how to decide which is right for you.
At a glance: Public vs. private health insurance in Germany
How does the German public health-insurance system work?
What is private health insurance in Germany?
When you should opt for private health insurance
Is it easy to switch between public and private health insurance?
3 misconceptions about private health insurance
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At a glance: Public vs. private health insurance in Germany
| Public health insurance | Private health insurance |
Who qualifies? | All residents in Germany. Note: Re-entry into the public system can be difficult if you’ve switched to a private provider. | Employed individuals earning more than €69,300, self-employed individuals, and students. |
What are the costs? | Health insurance = 14.6% Additional contribution rate = 1.6%* Nursing care insurance = 2.4 - 4%** | Varies based on your state of health, age (upon entry), and your desired level of cover |
Top providers | TK, Barmer, AOK | Allianz, Barmenia, Gothaer, Hallesche, Ottonova, SDK |
* Average additional contribution rate (increasing to 1.7% in 2024)
** A discounted rate is provided for people with children; may vary annually
How does the German public health-insurance system work?
The majority of the German population uses the public health-insurance system (Gesetzliche Krankenkasse). This system is funded by employer payroll contributions, and by self-employed workers and employees who pay premiums based on their income. Employees have 50% of their cover paid by their employer, whereas freelancers and self-employed workers must pay 100% of the costs themselves.
Insurees have the freedom to choose their providers and enjoy coverage for most health-related costs, including:
doctor and hospital visits
sick and parental leave
prescription drugs
Though mostly covered, some additional costs may be associated with hospital visits, prescriptions, and other types of treatment, such as dental care. We’ll get into those costs below.
A large majority of the population must be insured by the public system, or are insured by default (this is called being “compulsory insured”). For example, if you’re employed at a company and earn below €69,300 per year (€5,775 per month), you’re required to be insured through the public statutory healthcare scheme. (Note that these specific income requirements are for 2024 and change annually.)
Furthermore, most students and low-income residents are grandfathered into the system or benefit from it due to government subsidies. Others who don’t fall into these categories, such as self-employed individuals, may still opt for public insurance if they wish.
Because of the way the public health insurance system is managed, and the fact that most patients are part of the public system, insurees may have to contend with long wait times for certain types of care. Although the majority of medically necessary services are free or mostly covered by public providers, having to schedule important medical treatments or screenings far in advance may not appeal to some people.
Another issue has to do with rising costs for higher earners, due to the fact that public insurance covers most of the population (including elderly people, who account for most of the more serious health conditions). The rising costs for this healthcare needs to be covered by someone — and it’s unlikely to be the government.
Who are the major public health insurers in Germany?
If you’re insured through the public system, you’ll have to choose an insurance provider. This provider will be responsible for processing all your healthcare costs, and will issue you a health insurance card to bring with you to the doctor.
The three most common providers are TK (Techniker Krankenkasse), AOK, and Barmer GEK. Most providers offer the same benefits, but TK tends to be the most common choice for expats thanks to their English-speaking services.
What does public health insurance cost?
Public health insurance in Germany is calculated based on your gross salary (i.e. your salary before taxes).
Health insurance is charged at 14.6% of your pre-tax salary, plus an additional contribution rate of 1.6% (increasing to 1.7% in 2024). The maximum income these costs are calculated on is currently €4,987.50 per month (increasing to €5,175 per month in 2024). This amount increases every few years to account for the rising costs of healthcare. These costs are then split 50/50 between you and your employer.
Added to that is nursing-care insurance, which funds the nursing system for the elderly and disabled. Nursing-care premiums depend on how many children you have, with the highest premiums (4%) charged to those with no children. This cost is also split with your employer, with your employer contributing 1.7% per month.
As noted above, some additional costs apply to services that would generally be considered “covered” under public health insurance. For example:
There are fees of €10 for every hospital day (up to a maximum of €280)
You may have to pay up to €10 per prescription (this only applies to generics)
Vision correction is not covered
Dental care is only partially covered
A major benefit of public health insurance is that it will also provide cover for your spouse, for no additional cost, if they earn less than €485 per month. Your children are also covered until the age of 23 years old, or 25 years old if they are students.
The bottom line is that public health can be very good value for money — if you’re a low-income earner or you have a spouse and/or several children who are financially dependent on you. However, for anyone earning above €69,300 (or €30,000 as a freelancer), with no (or few) financial dependents, it can be quite expensive relative to what you get in return.
At this point, you may want to consider switching to private health insurance. Let’s now look at what that entails.
What is private health insurance in Germany?
Private health insurance in Germany (Privatkrankenversicherung) operates similarly to the public system, but there are some significant differences.
First off, coverage is only available to people who meet certain criteria based on their income level, entry age, and type of profession. Rather than the price being calculated on your income, premiums are priced on your entry age, health status, and level of cover you want. This means there is far more choice when it comes to your options — and, depending on your circumstances, the opportunity to save money.
So, why are people who are privately insured seen much faster than those in the public system? Because doctors and dentists can charge 2.3x the normal rate with private patients compared to standard, and up to a maximum of 3.5x without the patient’s consent (beyond that, the patient must provide consent in advance).
As you might imagine, the fact that doctors and dentists can earn up to 3.5x more with private patients (for the exact same treatment) is enough to move these patients to the front of the line.
Who are the major private health insurers in Germany?
The German market offers around 40 private health insurers to choose from, including Allianz, Barmenia, Gothaer, Hallesche, Ottonova, and SDK.
Each company’s policies differ, and the provider that best fits your needs will depend largely on your situation. Each provider offers its own app, which allows members to submit claims. Some even offer their services in English — a big plus for expats who do not speak German!
What does private health insurance cost?
Unlike public health insurance, premiums for private health insurance in Germany are based on individual risk assessments. Factors like age, current health status, desired coverage options, and level of risk all impact the price of your healthcare policy.
Depending on your entry age, state of health, and level of cover, your private health insurance would cost approximately €450 per month for basic cover and €850 per month for premium cover. For comparison’s sake, someone who is publicly insured, without children and earning above €62,100 per year (from 2024), would pay approximately €1,050 per month.
Note that German private health insurance providers aren’t legally allowed to cancel your policy based on claims you submit. This means the price of your cover will never increase due to any future health conditions.
Furthermore, private health insurance providers will charge you a 10% fee on top of your coverage to put toward your insurance premiums as you age (this fee is included in the estimated costs above) which stabilises your costs for your healthcare over the long term.
Who qualifies for private health insurance in Germany?
It’s important to emphasise that not everyone can opt into private health insurance. But if you earn more than €69,300, are self-employed, or are currently a student, you may find better healthcare options and significant cost savings on the private market.
Many expats in particular who come to Germany on a freelance visa find that private insurance offers them better coverage at a better price. In fact, if you move to Germany as a freelancer or self-employed worker from outside the EU, you must insure yourself privately. (If you’re earning below €30,000 per year and come from within the EU, you’re probably better off with public insurance until your income grows.)
When you should opt for private health insurance
Private health insurance has some significant advantages for expats.
For starters, you have greater choice when it comes to providers. You’ll also get easier access to appointments and medical procedures, and you’ll be able to choose from a wider variety of plans. This means you can tailor your cover and include benefits such as direct access to specialists, naturopathy and higher dental care. Quite often, you’ll find that you can also save a significant amount of money each month, even with higher-level tariffs.
But there are some cases where private insurance might not make as much sense.
Private health insurance costs are calculated per person. So, if you are only insuring yourself (or yourself and a maximum of two children), this can often be a better option — but public health insurance would likely be cheaper if you have more than two children and/or a non-working spouse.
Is it easy to switch between private and public health insurance?
If you qualify for private health insurance, you’ll need to opt out of the public system. This is relatively easily done.
If you’ve just arrived in Germany or started working at a new company, inform your HR department within 14 days of your contract start date that you’d like to opt for private insurance. You’ll receive a certificate from your private insurance to give to your employer, so that you can take advantage of the same cost-sharing benefits as you would with public health insurance (up to 50% of public health insurance costs can also be saved with private health insurance).
However, it’s important to note that once you decide to exit the public health insurance scheme, it can be difficult to get back in. This is why it’s important to speak with a health insurance specialist to ensure that private health insurance is the right option for you.
Expats who come from a country where the majority of the system is privatised may have trouble entering the public insurance system. And anyone who arrives in Germany from outside the EU as a freelancer must be privately insured.
3 misconceptions about private health insurance in Germany
1. Private insurance gets expensive in old age
Because one of the contributing factors in pricing for private health insurance is your age and health status, many fear that private health insurance gets more expensive the older you get.
But age is only a factor at the time of entry into private insurance. So, while it’s best to switch to private health insurance no later than age 45, you won’t face any increasing “age penalties” for being in private insurance as you get older.
What’s more, you can opt for a special tariff — which is split between you and your employer (if you’re employed) — that will reduce your monthly costs when you retire. For example, for every additional €30 you pay now (€15 from you, €15 from your employer), your costs will be reduced by €100 per month in retirement.
The exact savings may vary by provider. But what’s great about this is that your upfront costs are split with your employer and you alone enjoy the cost savings in the future. This means that private insurance can actually be much cheaper than public insurance in old age.
What’s more, certain aspects of private health insurance drop off in retirement and other parts are supplemented by your state pension insurance. You no longer need to pay the 10% statutory surcharge from the age of 60, and the contribution for the daily sickness benefit no longer applies from the start of retirement.
2. You must pay out of pocket for private insurance invoices
One of the biggest myths about private health insurance is that you must pay out of pocket for invoices.
Following care, you will receive an invoice that you must submit to your insurance provider. Your provider will then pay you money, which you will use to pay the invoice in full.
If you forget to submit the invoice to your insurance provider, or if you are slow in doing so, you may indeed need to pay out of pocket. But these situations are generally avoidable, and most people on private insurance don’t have to worry about paying upfront for their care.
3. When it comes to insurance, the cheapest option is the best
When it comes to health insurance, you get what you pay for. Trying to cut too many corners can backfire if you have a serious illness, or if you need long-term care.
Anyone switching to private insurance should be vigilant with providers who try to lure them in with cheap premiums that don’t offer adequate benefits or long-term cost efficiency. That’s why those opting into the private healthcare system should work with an insurance specialist who knows the system well and can help clients find the best cover for the best possible price.
At LeX-Wealth, we have a team of English-speaking experts who know the German health-insurance market front to back. We’ve helped hundreds of clients from more than 20 countries find the best insurance, at the best price.
Learn more about your options with LeX-Wealth
Whether you’re weighing private vs. public health insurance in Germany or trying to suss out your pension options, managing life as an expat can be a challenge.
At LeX-Wealth, we specialise in financial and wealth-planning services, from retirement planning to securing the right insurance for your needs. Our English-speaking specialists offer continuous support, no matter how diverse your goals are. Contact us today to learn more.
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