Health Insurance: What You Need to Know – A Comprehensive Guide
26 Apr 2025
8
Minutes
Katrin Straub
CEO at nextsure
Health insurance is a complex yet important topic for everyone in Germany. It provides coverage in the event of illness, but what options are available and what do they specifically offer? This article sheds light on what health insurance is and helps you gain a clear understanding.
The topic in brief and concise terms
In Germany, there is a health insurance mandate; most citizens are insured under the statutory health insurance scheme (GKV), which is based on the principle of solidarity.
Private health insurance (PHI) is an alternative for certain occupational groups and income brackets, offering more personalised tariffs with contributions based on risk and scope of services.
The choice between statutory health insurance (GKV) and private health insurance (PKV), as well as the conclusion of supplementary insurance policies, should be based on a careful analysis of personal needs, financial situation, and long-term life planning.
Understanding the Cornerstones of Health Insurance
Health insurance is a central component of the German social insurance system and ensures medical care. Its main task is to maintain, restore or improve the health of the insured. In Germany, almost ninety per cent of the population is covered by statutory health insurance. The system is based on the solidarity principle, where contributions are income-dependent, but benefits are the same for everyone. In addition to the statutory option, there is private health insurance (private Krankenversicherung - PKV) as an alternative for certain groups of people. The choice between statutory health insurance (GKV) and private health insurance (PKV) depends on various factors such as income and professional status. This decision has far-reaching consequences for insurance coverage and costs.
Statutory Health Insurance (GKV): Solidarity and Obligation
The statutory health insurance (GKV) is mandatory for the majority of the population in Germany. It is based on the principle of solidarity: members pay contributions according to their financial capacity but receive the same medically necessary benefits in the event of illness. The general contribution rate is fourteen point six percent of the income subject to contributions, plus an additional contribution specific to the insurance fund. Employees and employers usually share these contributions equally. Family members, such as spouses without their own income and children, can often be co-insured free of charge, which represents a significant financial relief for families. The benefits of the GKV are specified in the Fifth Book of the Social Code (SGB V) and include medical treatment, medications, hospital stays, and much more. An important aspect is that the GKV must accept anyone who meets the requirements, regardless of their health condition. This ensures broad access to medical care. The GKV is therefore a cornerstone of the health system.
Private Health Insurance (PKV): Individuality and Options
Private health insurance (PKV) provides an alternative to the statutory health insurance (GKV), but it is not accessible for everyone. Self-employed individuals, freelancers, civil servants, and employees with an income above the annual income threshold (in 2025: 73,800 euros gross) can opt for private insurance. Unlike GKV, PKV contributions are not primarily based on income but rather on individual risk (age, health status at the time of contract signing) and the chosen range of services. A benefit of PKV is often the ability to customise the range of services, which can exceed the standard GKV coverage. Those with private insurance can choose options such as single rooms in hospitals or treatment by the head physician. However, a separate premium must be paid for each family member, as there is no free family insurance like in the GKV. Switching from GKV to PKV should be carefully considered, as returning to GKV, particularly after the age of 55, is only possible under certain conditions. Additionally, PKV accumulates ageing reserves to help keep premiums stable in old age. This is an important difference from the pay-as-you-go system of the GKV.
Costs and Services in a Practice Comparison
The cost of health insurance varies greatly depending on the system and individual circumstances. In the statutory health insurance (GKV), an employee with a gross salary of 3,500 euros per month pays approximately 598.50 euros at an average total contribution rate of seventeen point one percent (fourteen point six percent general contribution rate plus two point five percent average additional contribution), of which the employee share is 299.25 euros. For a self-employed person with a monthly profit of 5,000 euros, the GKV contribution is about 855 euros (at seventeen point one percent). In private health insurance (PKV), contributions for a healthy 35-year-old self-employed person can be around 450 euros per month, but often provide more extensive services. The services of the GKV are legally defined and include basic care, such as medical treatment, medication, and hospital stays. The PKV often offers individually selectable, additional services such as chief physician treatment or alternative healing methods. It is crucial not only to consider the costs but also the scope of services and the long-term contribution development. A cost comparison should always take personal life circumstances into account. For families, the GKV can be more advantageous due to the free co-insurance of children. Choosing a system is therefore a very individual decision.
Compulsory insurance and possible additional coverages
In Germany, there is a compulsory health insurance requirement for all residents in the country. This is to ensure that everyone has access to medical care in case of illness and is not financially endangered by high costs. Those without insurance can expect to owe back payments. While statutory health insurance (GKV) benefits are comprehensive, they do not cover every desire. For areas where public health insurance only provides basic services or requires co-payments, private supplementary insurances can be beneficial. Popular supplementary insurances include:
Dental supplementary insurance: Covers costs for high-quality dental prostheses, professional dental cleaning.
Hospital supplementary insurance: Allows for single or double-bed rooms, treatment by the head physician.
Travel health insurance: Covers foreign treatment costs that GKV often does not or only partially bears.
Sickness daily benefit insurance: Secures loss of earnings in the event of prolonged illness, especially important for the self-employed.
These supplementary policies can fill gaps in GKV coverage and improve individual protection. The necessity and scope of such supplementary insurances depend on personal needs and risk appetite. Therefore, a careful review of one's own situation is advisable.
Expert Knowledge: Legal Frameworks and Current Developments
The legal foundations of health insurance are complex and primarily anchored in the Fifth Book of the Social Code (SGB V) for statutory health insurance (GKV) and the Insurance Contract Act (VVG) for private health insurance (PKV). The SGB V, for example, governs the insurance obligation, the service catalogue of the GKV, and the organization of the health insurance funds. For the PKV, the General Insurance Conditions (AVB) of the respective contract and specific paragraphs of the VVG, such as § 203 VVG on premium adjustment, are relevant. Current court rulings continuously influence the rights and obligations of policyholders and insurers. For instance, there are recurring decisions regarding the effectiveness of premium adjustment clauses in the PKV or reimbursement for new treatment methods. The Federal Court of Justice (BGH) has clarified that the notification of the essential reasons for a premium increase under § 203 paragraph five VVG requires specifying the calculation basis, the change of which prompted the adjustment. Our expert tip: Regularly inform yourself about changes in the legal situation and relevant judgments to know your entitlements. In complex cases or disputes with health insurance, professional advice, such as offered by nextsure, can be very helpful. Understanding the legal framework is crucial for making informed decisions.
Some important legal regulations include:
§ 5 SGB V: Compulsory insurance in the GKV.
§ 12 SGB V: Economic viability requirement of GKV services.
§ 193 VVG: Compulsory insurance in the PKV.
§ 203 VVG: Regulations on premium adjustment in the PKV.
§ 205 VVG: Right to terminate when insurance obligation in the GKV occurs.
These paragraphs represent only a small excerpt of the extensive legal provisions. Understanding these basics helps to better comprehend how the system operates.
Find the right health insurance for your needs
Choosing the right health insurance is an important decision with long-term implications. There is no single 'best' health insurance for everyone, as individual needs and circumstances vary greatly. For employees earning below the annual income threshold, membership in statutory health insurance (GKV) is usually mandatory. High-earning employees, self-employed individuals, and civil servants often have the choice between voluntary GKV membership and private health insurance (PKV). Families with children often benefit from the non-contributory family insurance in the GKV. Young, healthy singles with high incomes might find lower contributions and potentially more comprehensive benefits with PKV. It's advisable to consider not only the current contributions but also the long-term contribution developments, the range of benefits, and the flexibility regarding changes in life circumstances (e.g., starting a family, career changes, retirement). Comprehensive advice can help weigh the pros and cons and make an informed decision. nextsure is happy to assist you in crafting the optimal health coverage. Remember, supplementary insurance can also play a role in optimising your protection.
Your next step towards optimal insurance coverage
More useful links
Statistisches Bundesamt provides information on health insurance coverage in the context of work quality.
Statistisches Bundesamt provides data on healthcare expenditure in Germany.
Bundesministerium für Gesundheit delivers figures and facts on health insurance, including members and insured persons.
Bundesamt für Soziale Sicherung offers up-to-date figures and statistics on health insurance.
GKV-Spitzenverband provides key figures on statutory health insurance.
Verband der Privaten Krankenversicherung publishes a statistical report on private health insurance (2023).
Deutsche Rentenversicherung provides information on health and long-term care insurance for pensioners.
Gesundheitsinformation.de offers comprehensive information on health insurance in Germany.
Verbraucherzentrale provides useful information and advice on health insurance.
FAQ
What exactly is health insurance?
Health insurance is a system of coverage that covers or subsidizes the costs of medical treatments, medications, hospital stays, and other health services. In Germany, it is mandatory for almost all residents.
What types of health insurance are available in Germany?
There are mainly two systems: the statutory health insurance (GKV), in which the majority of the population is insured, and the private health insurance (PKV) for certain groups of people such as the self-employed, civil servants, and high earners.
How are health insurance contributions calculated?
In the statutory health insurance, contributions are calculated as a percentage of income up to the contribution assessment ceiling. In private health insurance, contributions depend on the age of entry, health status, and the chosen level of benefits.
Are the benefits the same in all health insurance plans?
No. The statutory health insurance (GKV) offers a legally defined catalogue of services that ensures comprehensive basic care. Private health insurance (PKV) allows for more individualised tariffs with often more extensive benefits that can go beyond the GKV standard.
What are supplementary insurances and when are they useful?
Supplementary insurance covers services not fully or only partially covered by statutory health insurance (e.g. dental prostheses, single-bed rooms in hospitals). They are beneficial if you wish to have protection beyond basic care.
Can I change my health insurance?
Switching between different statutory health insurance funds is usually possible without any issues by observing certain deadlines. A switch from statutory health insurance (GKV) to private health insurance (PKV) or vice versa is subject to specific conditions and should be carefully considered.
