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Old-Age Provisions in Private Health Insurance (PKV): Function and Significance for Your Contributions
Shaping healthcare in old age is a central question. With increasing life expectancy and medical progress, the challenges for financing health services are growing. In Germany, the Statutory Health Insurance (GKV) and Private Health Insurance (PKV) meet these challenges in different ways. A key element of the PKV is the so-called old-age provisions.
This article sheds light on the function and significance of old-age provisions, explains their role in contribution development, and highlights the differences compared to the financing model of the GKV.
Fundamentals of Financing Systems
The German health system is based on two pillars that fundamentally differ in their principles:
Statutory Health Insurance (GKV): It operates according to the pay-as-you-go system, which is based on the solidarity principle. The current contributions of members are used directly to finance current health costs. No individual reserves are built up for age-related increases in healthcare expenses. The contribution amount is income-dependent.
Private Health Insurance (PKV): It uses the funded system, which follows the equivalence principle. Insured individuals use their contributions to provide for their own, presumably rising costs in old age. A central component of this system is the creation of old-age provisions. Contributions depend on the chosen tariff, age at entry, and health status.
Function and Significance of Old-Age Provisions
Old-age provisions are savings portions within the PKV contribution that are built up from the beginning of the insurance. The goal is to compensate for statistically increasing healthcare costs in old age and to avoid a contribution increase solely due to aging.
These provisions are a significant factor for long-term financing planning in the PKV. The total volume of old-age provisions in the PKV amounted to approximately 328 billion euros nationwide at the end of 2023 for about 8.7 million fully privately insured individuals.
Contribution Development in GKV and PKV
Contribution development in both systems is subject to different dynamics.
In the GKV, the contribution amount is linked to income (up to the contribution assessment ceiling). The maximum GKV contribution in 2025 (including nursing care insurance) will be approximately €1,184 for insured individuals with children and approximately €1,218 for those without children. The absolute contribution burden for high earners increases due to the annual adjustment of the contribution assessment ceiling (BBG) to wage development.
In the PKV, contribution development depends on the general cost development in the healthcare system. Statistical comparisons by industry associations show that the percentage increase in contribution income per capita in the GKV has been slightly higher than that of premium income in the PKV in recent decades. However, such averages do not reflect the individual situation.
Contribution Adjustments in the PKV
Despite old-age provisions, contribution adjustments are also necessary in the PKV. These are not arbitrary but are legally regulated. The reasons include:
Rising healthcare costs due to medical progress.
A higher life expectancy than originally calculated.
Changes in the capital market (interest rates) that influence the returns on provisions.
Adjustments must be audited by an independent trustee. In contrast, the scope of benefits in the GKV is determined by the legislator in the SGB V and can be adjusted through health reforms.
Relevance for Your Contributions in Old Age: Stabilization and Relief
The PKV offers various mechanisms that affect contribution development in old age:
Statutory Surcharge: A contribution portion of 10%, paid between the ages of 21 and 60, flows additionally into old-age provision and ceases upon reaching the age of 60.
Contribution Relief Tariffs: Insured individuals can voluntarily save additionally to specifically reduce their contributions in old age.
Waiver of Daily Sickness Allowance: Upon retirement, the contribution for daily sickness allowance insurance generally ceases.
Tariff Change Right: Insured individuals have a statutory right (§ 204 VVG) to switch to another tariff within their insurance and take their old-age provisions with them.
Basic Tariff: As a social safety net, the basic tariff offers GKV-like benefits. The contribution is limited to the maximum GKV contribution and can be reduced in cases of need.
A return to the GKV is only possible under certain conditions and usually leads to the loss of accumulated old-age provisions.
Conclusion
Old-age provisions are a central feature of the PKV and serve to stabilize contributions in old age through forward-looking capital formation. They fundamentally distinguish the PKV from the GKV, which is based on a pay-as-you-go system.
While GKV contributions are heavily dependent on income and demographic development, the PKV, through old-age provisions and other mechanisms, offers options for long-term contribution planning. The choice of the appropriate system depends on individual life situations, income, and the desired scope of benefits.