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 Health Insurance Costs in Old Age: What Retirees Can Truly Expect
The development of healthcare costs in retirement is a central issue for many people. In particular, contributions to private health insurance (PKV) are often the focus. This article examines the structural differences between PKV and statutory health insurance (GKV) and explains the mechanisms that contribute to the development of PKV contributions in old age.
The Basics: Two Systems, Different Principles
The Solidarity Principle of GKV: GKV operates on the solidarity principle. Contributions are income-dependent, while benefits are provided based on need. In the pay-as-you-go system, current contributions are used directly to finance current healthcare expenses; no individual actuarial reserves are formed. The system is thus directly dependent on demographic developments.
The Equivalence Principle of PKV: PKV is based on the equivalence principle and the funded system. Contributions are based on the chosen scope of benefits, age at entry, and health status. A portion of the contribution is saved from the outset as actuarial reserves to finance the age-related increase in healthcare costs and stabilize contributions in the long term.
PKV Contribution Calculation and Stability in Old Age
Contribution calculation in PKV is designed for the long term and includes several mechanisms intended to ensure contribution stability in old age.
1. Actuarial Reserves as the Foundation
Actuarial reserves are the core of PKV financing in old age. They are formed to offset statistically increasing healthcare costs and avoid contribution increases solely due to aging. At the end of 2023, the PKV industry managed approximately 328 billion euros for this purpose.
2. Elimination of Specific Contribution Components in Old Age
As individuals get older or enter retirement, certain contribution components are eliminated, leading to an automatic reduction in contributions:
Elimination of the statutory 10% surcharge: This surcharge for additional capital formation is levied from ages 21 to 60 and is then dropped.
Elimination of daily sickness allowance: Contributions for the daily sickness allowance generally cease upon retirement, as income loss no longer needs to be insured.
3. Pension Insurance Contribution Subsidy
PKV-insured retirees receive a subsidy from the German Pension Insurance (DRV) towards their health insurance contributions. For 2025, this amounts to 8.55% of the statutory pension (limited to half of the actual PKV contribution).
4. Active Contribution Management by Insured Individuals
PKV-insured individuals have the ability to actively influence their contributions in old age:
Contribution Reduction Tariffs: Insured individuals can voluntarily make additional provisions at a younger age to specifically and guaranteed lower their contributions in old age.
Tariff Change Right (§ 204 VVG): Insured individuals have a legal right to change their tariff within their insurance company (e.g., to a tariff with a higher deductible), with actuarial reserves being maintained.
Basic Tariff: As a social safety net, the basic tariff offers GKV-like benefits. The contribution is limited to the GKV maximum contribution and can be reduced in cases of need.
PKV Contributions Compared to GKV: A Long-Term Perspective
Historical Development: Statistical comparisons by industry associations show that the percentage increase in contribution income per capita in GKV has been slightly higher than that of premium income in PKV in recent decades.
GKV Contributions in Retirement: Retirees in GKV pay contributions on their statutory pension, company pensions, and other retirement benefits up to the contribution assessment ceiling.
GKV Maximum Contribution Forecast: The GKV maximum contribution (including nursing care insurance) will be approximately €1,218 (childless) in 2025 and is expected to rise to approximately €1,250 in 2026.
Benefits: Another Factor in Old Age
GKV Benefits: The scope of benefits is defined by law in the SGB V and is subject to the principle of economic efficiency. It can be adjusted through political reforms.
PKV Benefits: The scope of benefits is contractually guaranteed individually in the chosen tariff and cannot be unilaterally reduced by the insurer. This guaranteed security of benefits is a significant advantage of PKV in old age.
Facts About Common Concerns
Contribution Adjustments: Contribution adjustments in PKV are legally regulated and are not arbitrary, but are based on the general cost development in healthcare. Getting older alone is not a reason for adjustment.
Protection Against Termination: Termination by the insurer due to illness or age is legally excluded for full health insurance coverage.
Return to GKV: A return is only possible under certain conditions and generally only up to the age of 55.
Summary
PKV has established mechanisms such as actuarial reserves and flexible tariff change options to stabilize PKV costs in retirement. Automatic relief results from the elimination of contribution components and the pension insurance subsidy. Nevertheless, both systems are affected by the general cost development in healthcare. A well-informed decision about future PKV contributions requires careful consideration of personal circumstances and the specific characteristics of each system.