Navigating the cost calculations for Germany’s distinct public and private health insurance schemes can be confusing in terms of what is or is not covered by the insurer. In this article, we delve into how contributions and premiums operate in both systems and explore the implications of surcharges and deductibles.
How much does health insurance cost in Germany?
Understanding the costs of health insurance in Germany can seem complex, particularly for newcomers to the country, like international students, foreign employees, and immigrants. The German health care system has two different schemes: public and private health insurance. Both systems ensure similar treatment for patients and cover necessary medical care and services to offset their costs.
However, the monthly amount you need to pay for insurance varies depending on which of the two systems you enroll in. Contributions are calculated uniquely for each scheme, and members may be subject to additional costs not covered by the insurance companies.
The vast majority of medical services are payed directly via health insurance card. However, co-payments are due for additional services or medicines.
Public health insurance: Paying your contributions
In Germany, public health insurance, also known as statutory health insurance, is based on the solidarity principle. Every member of a public insurance provider like Barmer pays a monthly contribution, utilized by the organization to cover costs for medical treatment and health care benefits for all members equally.
The individual monthly cost for health insurance is calculated based on gross income, but the percentage remains the same for every employee: 14.6 percent. Employees, however, do not bear the full amount themselves. Employers contribute to their employees’ public health insurance by covering over half of the abovementioned percentage, i.e., 7.3 percent.
This arrangement results in higher contributions for higher earners and lower contributions for those with lower incomes. There is a threshold: If you earn more than 62,100 euro per year (in 2024), the contribution is capped and cannot be increased.
Public insurance contributions for students with no income
Students below the age of 25 who are not employed and, consequently, have no monthly income, still have the option to enroll in public health insurance in Germany. They can be incorporated into a family health insurance plan at no additional cost. For students who work, their insurance coverage is contingent on their monthly income. This implies that, with a monthly income of up to 520 euro, they can still remain covered through a family health care plan. If their income surpasses this threshold, they are required to arrange insurance themselves.
What are additional contributions in public health care?
While contributions are standardized in Germany, meaning every public health insurance provider applies the same percentage for its contribution, additional costs are incurred in the form of an additional contribution rate. Since insurers are not obligated to charge a specified amount, this leads to variations in the expenses.
The additional contribution rate is also linked to your gross monthly income, similar to contributions, but the percentage is not as high. At Barmer, the additional individual contribution rate is currently 2,19 percent. In return, members receive a number of additional benefits, e.g. access to leading treatments or faster appointments with specialists.
Why are additional contributions necessary?
To understand why insured individuals are required to pay additional individual contributions, it is helpful to understand the financing structure of the German public health system. In 2009, new regulations were implemented, and the so-called ‘health fund’ was restructured. Since then, contributions are combined with taxes and collected in the fund at the federal level.
Public health insurers like Barmer then receive a set amount of money per insured person to cover their members’ health care expenditures and offer various health insurance services. The amount they receive is determined by the composition of their members, including factors such as age, gender, and risk. Since not all treatment costs can be covered by these funds, the additional contribution becomes necessary.
Out-of-pocket expenses: Understanding co-payments
Most services provided by statutory health insurers are financed through contributions. However, depending on the insurance services you receive, you may be obligated to pay a co-payment in certain cases. Generally, these fees were introduced to ensure that insured individuals make use of the services of their insurance provider responsibly. Compared to health care costs in other countries, such as the United States, the co-payment is only minor.
These out-of-pocket expenses, which cannot be reimbursed, apply to the following health care services, including but not limited to:
- Prescription drugs
- Bandages
- Medical devices and aids, such as crutches, hearing aids, prosthetics, and wheelchairs
- Transportation costs
- Hospital stays as well as stays at other inpatient and outpatient facilities or rehabilitation measures
- Home assistance
- Dental care
For example: If you are on sick leave and require certain prescription drugs from a pharmacy, you must make a co-payment. Generally, a fee of 10 percent of the selling price of the medicine is charged, with a minimum of five euro, and a maximum of 10 euro. In the case of a hospital stay, the co-payment is 10 euro per day for up to 28 days per year.
For dental care, bandages or hospital stays, you have to pay co-payments up to a certain limit out of your own pocket, which are not reimbursed by the health insurance fund.
Calculating private health insurance costs
In contrast to public health insurers, private insurance companies are not part of the federal German health fund. The costs of this insurance system are entirely funded through the members’ premiums.
The amount you need to pay in monthly premiums for private insurance in Germany, depends on the following factors:
- Your age: If you are younger, your premium is usually lower in the beginning.
- Your health status upon registration: Your medical condition significantly influences the cost of private health insurance. Basically, if you have a chronic illness, your monthly contribution will be set at a higher amount, resulting in potentially high premiums.
All basic necessary health care services are covered by your private health care plan. However, when receiving medical treatment, you may be required to pay the applicable costs upfront and will be reimbursed later after submitting the doctor’s or specialist’s invoice to the insurance provider. Additionally, other costs like surcharges and deductibles are subject to your individual coverage.
Furthermore, a family health care plan is usually not available with private insurance companies – a separate premium must be paid for each family member.
