Health Insurance Options in Germany – 2012
- 1 Government Health Insurance System (GKV)
- 2 Private Health Insurance (PKV)
- 3 Additional information for employees
- 4 Additional information for self-employed or non-employed persons:
- 5 Sick Pay Insurance
- 6 Travel Insurance and Evacuation Benefits
- 7 Dental Care
- 8 Pharmacies
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 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 checkups.
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. After the elections in 2009 a further health reform became necessary due to an expected budget deficit of over 10 Billion Euros for the GKV.
The introduction of the Gesundheitsfonds, which is a monstrous collection and distribution fund for all monies paid into the GKV, went into effect on January 1, 2009. The consequences were felt by all: the current 153 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. 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 – Private Krankenversicherung) 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 should not be considered a commodity but rather a financial support partner in difficult times in case illness, disease or accidents should happen.
Government Health Insurance System (GKV)
Most German residents (approximately 70 million people) are members of the government health system. If your gross salary is below 50,850 Euros per year or 4,238 Euros per month then membership in the GKV is mandatory. The government health insurance scheme is administered by approximately 140 Krankenkassen and they must all charge the same basic rate. The basic rate of government health insurance is 15.5 % of eligible gross salary up to a maximum monthly income of 3,825 Euros (2012 figures). If you earn more than this, you do not pay a higher insurance premium. Assuming you pay the maximum monthly premium of 593 Euros as an employee earning at or above the threshold and are therefore a voluntary member, your contribution is approximately 314 Euros and your employer pays approximately 279 Euros. The general minimum period of membership with a particularKrankenkasse 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 also 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 (Pflegeversicherung). 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 1.95% or 2.2% of your gross salary (maximum approximately 84 Euros per month) 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 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 services out of pocket.
Public health insurance funds sometimes offer supplemental insurance plans from a particular provider, offering a group rebate. Please be aware that you would then be committed to them for three years and could not cancel even if premiums are increased. Such tied plans are largely unnecessary as you have a wider choice of benefits on the private health insurance market.
Private Health Insurance (PKV)
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 well served by about 40 German insurance companies, and there are premium/benefit combinations available to suit most budgets. The per person cost of full medical insurance is based on the level of benefits chosen, as well as on age, gender and any pre-existing conditions that those persons to be covered may have. If you arrange private health insurance after December 20, 2012 you will have access to the unisex tariffs only. This basically means that males will have to pay a higher premium for health insurance in the future. Whether or not females would pay less remains to be seen. A portion of your medical insurance premiums has also been tax deductible from your German income taxes since 2010.
The government insurance premium covers you and all your non-working dependents, whereas the private medical insurance premium is paid for each person covered. You can reduce the monthly cost of your private insurance by agreeing to a deductible. 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 at your retirement.
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 German’s 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 50,850 Euros per year (2012 figures). Self-employed persons, German civil servants and those persons working part-time and earning less than 400 Euros per month are also eligible.
If you are presently in the German public scheme and earn more than 50,850 Euros per year you can to 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 stay either in the public system as a voluntary member or to 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 VArbeitgeberbescheinigung) you may take advantage of the same employer subsidies as a government plan member. This translates to approximately 280 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 self-employed or non-employed persons:
It is illegal to be uninsured.
German private health insurance companies are 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 theKrankenkasse. Unfortunately this monthly premium is approximately 593 Euros per month for each adult and approximately 270 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 an existing non-German insurance please note that you must in any event still pay into the government long-term nursing care scheme (Pflegeversicherung) 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 2,342 Euros per month as statutory sick pay (Krankengeld) for up to a maximum of 78 weeks.
If you earn 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 2,340 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.
Travel Insurance and Evacuation Benefits
The German public health insurance system will provide you with limited cover for travel within the EU. If you need medical care while traveling to another EU country, you will normally need to take the necessary EU forms with you when you travel. You will be required to pay the medical costs yourself and then to fill out the necessary EU forms in order to apply for a reimbursement on your return. 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 purchase a travel insurance policy. 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.
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 have a reputation for suggesting complicated, expensive 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.
Germany has an extensive network of pharmacies (Apotheken) with branches on just about every second corner in town, easily recognized by big red “A” sign. The state health insurance generally provides reimbursement for prescription generic drugs, though normally 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 is forcing some discounts from the large drug companies.
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.
Health insurance information provided by Cathy J. Matz-Townsend
Copyright 2012. All information as per August 2012 – www.insure-invest.de
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