Private or statutory – which is better?


Lerato Khumalo

In Germany, you can either take out private or statutory health insurance. If you have the choice, you may wonder which is more worthwhile. An overview.

The most important things at a glance

Self-employed people, civil servants and well-paid employees in Germany can choose: Should they choose statutory health insurance, as is the case for around 90 percent of citizens, or private health insurance?

There is no blanket answer as to which choice is better, but if you know the most important differences, you will at least have some help in making your decision. We will show you which aspects you should consider and what advantages and disadvantages the two systems have.

Statutory health insurance (GKV) is generally open to everyone, while private health insurance (PKV) is only available to certain professional groups such as civil servants, the self-employed, students and high earners above the so-called annual salary limit. In 2024, this limit will be 69,300 euros gross per year.

Private health insurance providers can also reject applicants due to pre-existing conditions or age. However, this does not apply to basic and standard tariffs, i.e. those tariffs with very limited benefits. In these cases, private health insurance companies must at least accept all those who are not required to have statutory health insurance or who have already had private insurance.

In statutory health insurance, the contribution depends on your income; in private health insurance, it depends on your age when the contract is concluded, your state of health and the benefits you choose.

Those with statutory insurance pay 14.6 percent of their income into health insurance, plus the additional contribution set by the health insurance companies themselves. If you are employed, your employer pays half of the health insurance contribution, so you only pay 7.3 percent.

However, the amount of the contributions is capped by the so-called contribution assessment limit. If you earn more than 5,175 euros a month in 2024, income above this amount will no longer be used to calculate contributions. You can read where the limit is for other social insurance schemes here.

If you earn little, you also pay little for statutory health insurance. However, the minimum contribution also sets a lower limit. The state sets a fictitious minimum income for this. It is currently 1,178.33 euros per month. You can read about the resulting health insurance contribution here.

If you are voluntarily insured in the statutory health insurance scheme and are not employed, not only your salary is taken into account when calculating contributions, but also other income such as income from renting and leasing, interest and dividends, civil servant salaries or maintenance. If you have no income of your own but do have a spouse, you can join them without paying contributions. The same applies to children.

This is not possible with private health insurance. Spouses and children must insure themselves independently. The amount of the PKV contributions also varies greatly, as they depend on age, state of health and the chosen tariff. If you are employed, the employer also pays half of the premium for private health insurance, but only up to the maximum rate of around 422 euros per month (as of 2024).

Private health insurance companies sometimes offer lower premiums than statutory health insurance, but the older you get, the higher the premiums will be, as they are based on your age, among other things. This also applies if you are already retired.

In order to at least cushion these premium increases somewhat, private health insurers set aside part of the monthly premiums as so-called old-age provisions. In return, they charge all insured persons who are younger than 60 a 10 percent premium surcharge. The money is then used to ensure that premiums increase less sharply from the age of 65. However, the old-age provisions cannot cover all the health costs that arise over time as a result of increasing age.

If you can no longer afford the contributions and therefore want to switch back to the statutory health insurance scheme, this is only possible under strict conditions and is often associated with high additional contributions.

There are a few tricks to reduce the premiums for private health insurance: One option is to choose tariffs with deductibles. This means that you pay part of the health costs yourself. It is not possible to say with certainty how profitable this will be for you. If you rarely need treatment, the decision is worthwhile, but if you are often ill or have long-term illnesses, you are probably better off not having to pay anything yourself.