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HEALTH INSURANCE

Could it soon get harder to get private health insurance in Germany?

According to reports in German media, the Social Democrats (SPD) and Greens want to make it harder for high earners to switch to private health insurance. Here's what you need to know.

Health insurance cards from statutory insurer AOK.
Health insurance cards from statutory insurer AOK. German health insurance will pay your medical bills, including sick pay for up to 78 weeks. Photo: picture alliance/dpa | Karl-Josef Hildenbrand

What’s going on?

Germany’s health insurance funds have been struggling with huge deficits recently – especially in the wake of the Covid pandemic that placed an unprecedented burden on the health and care system.

This year, the statutory insurance funds (GKV) could face a historic deficit of €17 billion, while the care insurance funds need an estimated €4.5 just to stabilise the system.

Health Minister Karl Lauterbach (SPD) has recently taken a number of steps to correct the situation, including allowing insurance funds to hike their additional contributions to enforcing pharmaceutical discounts on medicines. But there are signs that his emergency measures may not be enough.

Speaking to Handelsblatt on Monday, Dagmar Schmidt, vice chair of the SPD parliamentary group, called for a discussion on placing a higher financial burden on high earners in order to plug the financial hole in the healthcare system. 

Schmidt said a “significant increase” in the threshold for switching from public insurance to private insurance was needed to ensure that wealthier people in Germany were shouldering their fair share of the costs.

This would likely involve raising the salary threshold for transitioning to private insurance from €4,987.50 gross per month to the same level required to opt out of public pension contributions: €7,300 per month in western states and €7,100 per month in eastern states. 

READ ALSO: Will health insurance costs go up again in Germany?

How does the system work at the moment? 

Currently, regular salaried employees in Germany must have statutory health insurance unless their income exceeds a certain threshold. This threshold increases incrementally each year and currently stands at €66,600 per year for 2023. 

If employees earn over this amount, they have the option to switch into the private system and opt out of statutory insurance contributions. Since private insurance isn’t income-linked and generally provides more attractive benefits than statutory insurance – including lower waiting times – many higher earners choose to make that switch.

In addition to the salary threshold, there are a few other exceptions to obligatory public insurance for certain groups of the population.

A health insurance card.

A health insurance card. Photo: picture alliance/dpa/BKK Mobil Oil | gettyimages/Lothar Drechsel

For example, freelancers can generally choose whether to take private or public insurance, though it can be hard to switch back to statutory insurance after opting for private.

This can be an issue in later life when private insurance contributions can go up significantly, or in circumstances when higher earners end up in a much lower salary bracket.

As of 2020, around 90 percent of the population were paying statutory insurance contributions, while 10 percent had private insurance, according to data published by the Association of Substitute Health Insurance Funds (VDEK).

READ ALSO: German doctors debate added fees to ‘no-show’ appointments

What do each of the parties think of the current system?

Hiking the earnings threshold for entering the private healthcare system has long been a goal of the centre-left SPD – and it seems the largest party in the traffic-light coalition also has support from the Greens.

Maria Klein-Schmeink, vice chair of the Greens’ parliamentary group, told Handelsblatt that her party would also support such a move.

“This would mean significant additional income for the statutory health insurance and – unlike higher contribution rates – would only burden high earners,” she explained.

However, the reignition of the healthcare debate by both the SPD and Greens sets the parties on a collision course with the liberal FDP, who currently control the Finance Ministry within the traffic-light coalition.

Dagmar Schmidt

Dagmar Schmidt, vice chair of the SPD parliamentary party, has been calling for a shake-up of the health insurance system. Photo: picture alliance/dpa | Kay Nietfeld

In their party manifestos back in 2021, both the Greens and SPD had called for an end to the two-tier insurance system of private and public health insurance, arguing that it was unfair for higher earners to opt out of statutory contributions. This idea was branded ‘Citizens’ Insurance’ (Bürgerversicherung).

However, these proposals were blocked by the FDP during coalition negotiations and never made it in to the final coalition pact. 

But Schmidt said the FDP’s insistence on austerity measures had forced the coalition to consider other options financing the healthcare system outside of government subsidies. 

“The question is how the coalition will finance its health policy plans,” she said. 

In the aftermath of the pandemic and Russia’s invasion of Ukraine, Finance Minister Christian Linder (FDP) is keen to regain control of the nation’s finances and dramatically cut government spending.

“The Minister of Finance does not see himself in a position to provide subsidies for (healthcare) at the moment,” Schmidt said. “Because service cuts are not an alternative, we have to improve the revenues of the social security system.”

Could the SPD and Greens force a shake-up of the health system? 

The debate over whether to shake up Germany’s existing healthcare system is likely to come to a head as the coalition parties – and opposition CDU/CSU – debate the forthcoming budget. 

The FDP remains firmly against proposals to make it more difficult for higher earners to switch to private insurance – largely because it would spell a reform of the two-tier health insurance system. 

However, Schmidt hinted in Handelsblatt that the Greens and SPD could potential refuse to support the Finance Ministry’s plans if Linder wasn’t prepared to make concessions.

FDP leader Christian Lindner

FDP leader and Finance Minister Christian Lindner speaks at a press conference in Berlin. Photo: picture alliance/dpa | Sebastian Gollnow

READ ALSO: What to know about Germany’s new health insurance fees for 2023

“After all, the finance minister wants to get a majority for his budget,” she said.

Nevertheless, not everyone is convinced that funnelling more people into the statutory insurance system would solve existing issues.

Speaking to Handelsblatt, economist Martin Werding, slammed the proposals as “citizens’ insurance through the back door”.

If the income threshold were to rise to the level of the pension insurance, only a small minority of workers would be able to opt out of statutory health insurance, meaning the private insurance funds would be “bled dry”, he said. 

Member comments

  1. “This would mean significant additional income for the statutory health insurance and – unlike higher contribution rates – would only burden high earners,” she explained.

    Great. Pay more for crappier care. Socialism is the worst.

  2. So if you earn less than €66,600 per year, you can’t have a private insurance? I don’t think this is accurate

  3. If the objective is to increase the money that the health care system can “spend”, the answer is for those that can afford it (as always) to take out additional insurance to pay for additional perks, such as single bed rooms, bespoke meals, improved bedside views or whatever.

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For members

HEALTH

Does my German health insurance cover me if I get sick abroad?

If you’ll spend some time abroad this year, it may be worth checking if your German health insurance will cover you while travelling. Many German health insurance policies offer some coverage abroad, but not everywhere.

Does my German health insurance cover me if I get sick abroad?

If you’re planning to travel this summer, you may want to review your German health insurance policy before you leave. It’s wise to know what your insurance will and will not cover in case you or a family member get sick abroad.

As a reminder, health insurance is mandatory for all residents in Germany. So all legal residents here undoubtedly have at least the basic required coverage, provided by one of Germany’s public health insurance providers or a private health insurance plan that meets the minimum coverage requirements.

German insurance does cover medical emergencies in Europe

Statutory health insurance holders in Germany automatically receive a European Health Insurance Card (EHIC). In many cases your EHIC is the same as your regular health insurance card (Gesundheitskarte).

READ ALSO: EXPLAINED – Can you switch from private to public health insurance in Germany?

For those with an EHIC, necessary health care is covered in European countries. For example, if you get sick while travelling Europe, or have an accident or need urgent surgery, your German insurance will pay for the immediate emergency treatment you require.

Some health insurance plans may also extend their coverage to a few other countries beyond the EU, such as Switzerland, Iceland or French territories like French Guiana or Guadeloupe, just to name a few examples. 

But generally basic coverage does not extend to Africa, the Americas, Australia or Asia.

A full list of countries where you can use your EHIC is found here.

health insurance cards

Many health insurance cards in Germany double as a European Health Insurance Card (EHIC), meaning that they can be used across Europe. Photo: picture alliance/dpa | Jens Kalaene

Note that this care does not necessarily extend to treatments that are not urgent. Once your condition is stabilised and it is safe for you to travel, you may be transferred back to Germany to finish any further treatments at home.

Generally doctors in other European countries should be able to bill EHIC providers directly, but if not, you’ll want to keep your bill and submit an invoice to your health insurance provider for a reimbursement. In this case, you should collect and keep all the documents you receive related to your care, like prescriptions and receipts.

Generally additional health insurance would be required for long-distance trips. If you are taking a business trip abroad, your employer is responsible for reimbursing health care costs.

Note that health costs can be considerably more expensive in other countries

A standard health insurance plan in Germany won’t cover medical expenses incurred in most countries outside of Europe, so you may want to purchase travel health insurance for trips beyond the continent.

Keep in mind that in some countries, like the United States, the cost of medical care tends to be significantly higher than it would be in Germany. So purchasing additional care insurance may be worth considering when travelling there.

Most major insurers in Germany, like Allianz and AXA, offer supplemental global health coverage that would pay for most of the costs which are un-refunded by your main insurance while travelling.

READ ALSO: Could it soon get harder to get private health insurance in Germany?

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