This article was translated from the original human-written German version. While we strive for accuracy, we cannot guarantee it is error-free. We recommend consulting the German original for the most precise information. This content is for informational purposes only and does not constitute financial or legal advice. Always consult with a qualified professional before making insurance or financial decisions.
Private Krankenversicherung (PKV) Contributions: How Costs Are Calculated
Choosing health insurance is a fundamental financial decision. The calculation of contributions in Private Health Insurance (PKV) in particular often raises questions. While in statutory health insurance (GKV), contributions primarily depend on income, PKV contributions follow a different logic. This article explains how your contribution in the PKV is calculated and which factors influence the costs over time.
Basics of Contribution Calculation in the PKV
German healthcare is based on two pillars: the GKV and the PKV. They differ fundamentally in their principles and contribution calculation.
Differences in the Systems
GKV: Based on the solidarity principle and the pay-as-you-go system. Contributions are income-dependent up to the contribution assessment ceiling. No individual old-age reserves are formed.
PKV: Follows the equivalence principle and the funded system. Contributions are risk-based and independent of income. Part of the contribution is saved as old-age reserves.
Key Factors of Contribution Calculation in the PKV
Your PKV contribution essentially consists of three pillars:
Selected Tariff (Scope of Benefits): The PKV offers a wide range of tariffs. The more comprehensive the contractually agreed benefits (e.g., chief physician treatment, single room), the higher the contribution usually is.
Entry Age: The younger you are at the start of the contract, the more time there is to save old-age reserves, which generally leads to a lower contribution level.
Health Status: A health check is required before concluding a contract. Pre-existing conditions can lead to risk surcharges or exclusions of benefits. In contrast, the GKV has a duty to accept everyone, regardless of health status.
Detailed Look at Cost Factors
Old-Age Reserves – The Foundation of the PKV
A significant difference from the GKV is the formation of old-age reserves. Part of your monthly contribution is saved from the start and invested with interest. Its purpose is to finance age-related increasing healthcare costs and to stabilize contributions in the long term. At the end of 2023, the PKV industry managed around 328 billion euros for this purpose.
Contribution Adjustments in the PKV
Although old-age reserves provide stability, contribution adjustments (BAP) are necessary. These are not made arbitrarily or solely based on getting older. The reasons are clearly defined by law:
Rising healthcare costs (e.g., due to medical progress).
Changes in the life expectancy of insured persons.
The interest rate environment in the capital market.
Adjustments must be audited by an independent trustee. Statistical comparisons of the percentage development of contributions in both systems are complex. According to industry associations, premium income per capita in the PKV has risen somewhat more slowly in percentage terms in recent decades than contribution income in the GKV.
Tax Deductibility
Contributions for basic coverage in health and long-term care insurance are tax-deductible in both GKV and PKV within the scope of legal requirements.
Family Friendliness in the PKV
While the GKV offers free family insurance, every family member in the PKV requires their own contract. The costs for this are partially offset:
There are special, heavily discounted tariffs for children.
Employees receive the employer's contribution also for their children's contributions (up to the maximum amount).
For civil servants, the 'Beihilfe' (subsidized healthcare for civil servants) covers a large part of the costs for dependents as well.
Flexibility and Switching Options
Switching from the PKV back to the GKV is only possible under certain conditions and usually only up to the age of 55. However, within the PKV, there is a legal right (§ 204 VVG) to change tariffs to adjust benefits or contributions. The old-age reserves built up in the process are retained.
What You Should Consider When Making Your Decision
Assess Your Personal Needs: Which benefits are important to you and should be contractually guaranteed?
Consider the Long-Term Cost Development: Weigh the GKV's pay-as-you-go system against the PKV's funded system.
Evaluate Your Family Situation: Calculate the total costs for your family in both systems.
Inform Yourself About Switching Options: Understand the flexibility and limitations of changing systems or tariffs.
Summary
The calculation of contributions in the PKV is an individual, risk-based procedure based on the selected tariff, entry age, and health status. A central element is capital-funded provision through old-age reserves, which aims for long-term contribution stability in old age. Both systems face challenges from demographic change and medical progress. A well-founded decision requires careful consideration of the personal situation and the respective system advantages.