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.
What to Do About a Premium Increase in Private Health Insurance – Your Options
This article explains the reasons for premium adjustments in Private Health Insurance (PKV). It sheds light on the legally regulated background and shows insured individuals what options they have for managing and reducing their premiums.
Basics of Premium Adjustments in Private Health Insurance
Premium calculation in PKV is based on the funded coverage system. This means that each insured person is responsible for providing for their own expected rising healthcare costs in old age with their premiums. A key element here is the formation of actuarial reserves, which occurs from the beginning of the insurance. In 2023, the actuarial reserves for the entire PKV sector amounted to EUR 328 billion for 8.7 million insured individuals.
Premium adjustments (BAP) in PKV are not arbitrary or solely based on a person getting older. Legal regulations stipulate that a premium adjustment may only occur if certain triggering factors cause a deviation from the original calculation. These factors include:
Medical-technical progress: New diagnostic and treatment methods or more expensive medications lead to rising treatment costs.
Increased life expectancy: The longer lifespan of the insured leads to a longer period of benefit claims.
Changes in the interest rate: A persistent low-interest-rate environment can make it difficult to achieve the original interest rate.
Increased use of medical services.
In the Statutory Health Insurance (GKV), the premium is income-dependent and financed through the pay-as-you-go system. In Private Health Insurance (PKV), the premium is risk- and tariff-dependent and calculated using the funded coverage system with actuarial reserves.
Options for Premium Stabilization and Reduction in Old Age
PKV offers various mechanisms to stabilize or reduce premiums. These can be divided into automatic relief and active management options:
1. Automatic Premium Relief in Old Age
Abolition of the Statutory Surcharge: Between the ages of 21 and 60, insured individuals pay a statutory surcharge of 10%. This is abolished upon reaching the age of 60, leading to automatic premium relief.
Abolition of Daily Sickness Allowance: Upon reaching retirement age, the premium for the daily sickness allowance usually ceases.
Subsidy from Pension Insurance: In retirement, PKV insured individuals receive a subsidy from the German Pension Insurance (Deutsche Rentenversicherung Bund). This amounts to 8.1% of the statutory pension and is capped at a maximum of half of the actual health insurance premium.
2. Active Management Options by the Insured
Tariff change within the company (§ 204 VVG): Insured individuals have a legal right to switch to other tariffs, with the accumulated actuarial reserves being fully credited. This allows for an adjustment of the scope of benefits or a reduction in premiums.
Premium relief tariffs: Many PKV companies offer special tariffs for retirement provision.
These allow for a guaranteed premium reduction from a certain age (e.g., from 67).
Premiums are fully tax-deductible.
The employer can subsidize up to 50% of these premiums.
Ideally, the premium can be reduced to zero in old age.
Basic tariff: If premiums are no longer affordable, the basic tariff offers a social safety net. The premium is capped at the maximum contribution of the GKV and can be halved by the social welfare office or covered by it if there is need.
3. Return to Statutory Health Insurance (GKV)
Returning from PKV to GKV is subject to conditions, such as the occurrence of a GKV insurance obligation and generally the age limit of 55. In the event of a system change, the actuarial reserves built up in PKV cannot be transferred.
The Role of PKV in the Healthcare System
The financial flows in the German healthcare system are shaped by GKV and PKV. Medical services for private patients are remunerated directly according to the scale of fees for doctors (GOÄ), usually without budget limits. In 2023, expenditures by private patients amounted to approximately 45 billion euros. These different remuneration models influence the economic framework for medical practices and hospitals.
Recommendations and Conclusion
To be prepared for premium adjustments, insured individuals should consider the following:
Inform yourself proactively: Understand the mechanisms of premium adjustment.
Utilize premium relief tariffs: Early provision can significantly reduce premiums in old age.
Regularly review your tariff portfolio: Exercise your legal right to change tariffs.
Apply for the pension insurance subsidy: Actively submit the application upon reaching retirement age.
Learn about the basic tariff: Be aware of this legally regulated alternative.
In summary, premium development in PKV is based on the funded coverage system. Insured individuals have various options, such as internal tariff changes, to adapt their coverage and premiums to their personal situation. An informed engagement with these possibilities is crucial.