Private health insurance for pensioners: How to maximise your tax savings
6 May 2025
11
Minutes
Katrin Straub
CEO at nextsure
Many retirees are unsure how to claim their private health insurance premiums on their taxes. This article precisely explains which amounts are deductible and how to effectively reduce your tax burden. Discover specific recommendations for your situation.
The topic in brief and concise terms
Pensioners can deduct contributions for the basic coverage of their private health insurance and the full compulsory long-term care insurance from their taxes, with a maximum amount of 1,900 euros applicable for other precautionary expenses.
Additional services of the private health insurance can only be deducted when the maximum amount of 1,900 euros has not yet been exhausted by the basic contributions.
The insurance companies report the deductible contributions electronically to the tax office; the information is provided in the Provision for Future Expenses form.
Quick Facts: PKV Contributions for Pensioners and Taxes
For retirees with private health insurance, the tax deductibility is an important factor for financial relief. Contributions towards basic coverage, comparable to the service level of statutory health insurance (GKV), are fully deductible. You can also fully claim the contributions to private long-term care insurance.
Here are the key points regarding the tax deductibility of private health insurance for retirees:
Basic coverage fully deductible: The portion of your private health insurance (PKV) contributions that ensures basic coverage fully reduces your taxable income.
Mandatory long-term care insurance: Contributions to this are always one hundred percent deductible.
Maximum amount for other pension expenses: For retirees, as for employees, an annual maximum amount of 1,900 Euros applies for further pension expenses.
Social insurance subsidies: This subsidy to your PKV is considered when calculating the deductible contributions.
Additional benefits: Costs for optional benefits (e.g., chief physician, single room) can only be deducted if the maximum amount of 1,900 Euros has not already been exhausted by the basic contributions.
Report to the tax office: Your insurer automatically transmits the relevant data.
These regulations help you reduce your financial burden in retirement. The next section provides practical insight into how these regulations have a concrete impact.
Practice Check: Understanding Deductible Contributions and Maximum Limits
The contributions to private health insurance often consist of parts for basic coverage and for optional or additional benefits. For pensioners, it is crucial that the basic coverage is generally fully recognised for tax purposes. This includes services that correspond to the level of statutory health insurance. Your private long-term care insurance is also completely deductible.
The maximum amount for other precautionary expenses is 1,900 euros per year for pensioners. If your contributions to basic health and long-term care insurance already reach or exceed this amount, no further precautionary expenses (such as for accident or liability insurance) can be claimed for tax purposes. For example: If your deductible basic portion is already 2,000 euros, the maximum amount of 1,900 euros is exceeded. The costs of your private health insurance can thus directly reduce your tax burden. The German Pension Insurance pays you, as a privately insured pensioner, a subsidy towards your health insurance contributions, which reduces your own expenses. This subsidy is already taken into account when determining the deductible contributions. It is important to carefully check the annual certificate from your insurance, as it lists the amounts relevant for tax purposes. This information is crucial for your tax return and correct entry. In the following, we delve deeper into the legal basis and expert tips.
Expert Depth: Legal Foundations and Optimization Approaches
The tax deductibility of contributions to private health insurance is regulated in § 10 of the Income Tax Act (EStG), significantly influenced by the Citizen Relief Act. This law ensures that expenses for basic healthcare are tax-deductible. For retirees, this means that the portion of PHI contributions that serves basic coverage is deductible as a special expense. Your private health insurance calculates this portion and reports it directly to the tax office along with your tax identification number. You will receive a certificate for your records.
Our expert tip: Check if prepaying your PHI contributions for up to three years could provide tax benefits. This can be particularly useful if your income is higher in a given year, causing you to fall into a higher tax bracket. Such prepayment can maximize deductible special expenses in one year. However, be aware that contribution refunds reduce your deductible pension expenses in the year they are received. These must be declared in the tax return. For the accurate entry of insurances in the tax return, the 'Vorsorgeaufwand' form is relevant. Let's now clarify the specific steps you need to consider in your tax return.
Step-by-step: Private health insurance contributions in the tax return for retirees
Providing the correct information about your private health insurance contributions in your tax return is crucial to fully leveraging the potential tax benefits as a retiree. Fortunately, a significant portion of the work is handled by the electronic data transmission from your insurer to the tax office. Nonetheless, it is important to review the certificates received and verify the amounts in the 'Anlage Vorsorgeaufwand' section of your tax return.
Here's how to proceed:
Check the insurer's certificate: Your private health insurance sends you an annual certificate detailing the amount of contributions paid in the previous year that are tax-deductible for health and nursing care insurance. This includes a breakdown into basic cover and any additional benefits.
Anlage Vorsorgeaufwand: Enter the certified amounts in the corresponding lines of the 'Anlage Vorsorgeaufwand' section of your income tax return. Line numbers may change slightly from year to year, so use the field descriptions as your guide.
Retirement insurance subsidy: The subsidy paid by the German pension insurance towards your private health insurance is usually already considered in the calculation of deductible contributions by the insurer or must be separately listed.
Declare contribution reimbursements: Any contribution reimbursements received reduce your deductible expenses and must also be declared in the 'Anlage Vorsorgeaufwand'.
Additional pension expenses: If your contributions towards basic health and care insurance do not reach the maximum amount of 1,900 euros, you can include other insurances (e.g., liability, accident insurance) up to the maximum amount here.
Careful processing ensures you achieve the maximum tax savings. With this knowledge, you can also make good use of the advantages of your private insurance for tax purposes. But what happens with contributions for optional services?
Elective services and deductibles: Additional deductions available for retirees
In addition to the contributions to basic coverage, private health insurance often includes costs for optional services. These typically include treatment by a senior physician, a single or double room in the hospital, or high-quality dental prosthetics. These additional services are generally not part of the tax-supported basic provision. However, they can be deducted as "other preventive expenses," provided that the annual maximum amount of 1,900 euros for pensioners has not already been exhausted by the contributions to basic health and nursing care insurance. In practice, this scope is often already depleted by the basic costs for many pensioners. Your private health insurance in retirement often provides comprehensive protection.
Deductibles, meaning the portion of medical costs you cover yourself before the insurance kicks in, cannot be deducted as preventive expenses. However, they can potentially be claimed as extraordinary burdens if they exceed the reasonable burden limit. This also applies to co-payments for medication or costs for glasses lenses that were not reimbursed by the private health insurance. Note that the reasonable burden is calculated individually and depends on your income, marital status, and number of children. A thorough examination and gathering of all receipts are essential here. Knowing these details helps you get the most out of your tax return. Now let's summarize the key points for you.
Summary and your next step for tax optimization
The tax deductibility of private health insurance offers retirees a valuable opportunity to reduce their financial burden. Central to this is the distinction between fully deductible basic coverage and only partially deductible optional benefits. The maximum amount of 1,900 euros for other pension expenses plays an important role. Contributions to compulsory long-term care insurance are always fully deductible. The electronic reporting by insurers simplifies the process, yet it remains essential to review the certificates yourself and ensure the correct entry in the pension expense section.
Remember that premium refunds are also relevant for tax purposes and reduce your deductible expenses. A thorough understanding of the regulations and careful documentation are key to optimising tax benefits. Private health insurance can thus also provide financial flexibility in old age. If you would like to examine your individual situation and uncover potential for optimisation, we are happy to assist you.
More useful links
Der Verband der Privaten Krankenversicherung provides information about private health insurance for pensioners in Germany.
Die Deutsche Rentenversicherung provides information about health and long-term care insurance for pensioners.
Die Bayerische Versorgungskammer provides information on taxes and social security for pensioners.
Die Deutsche Rentenversicherung offers a brochure with information on tax law for insured persons and pensioners (PDF).
Das Bundesfinanzministerium provides a document on data exchange between private health/long-term care insurance and tax authorities/employers (PDF).
Die Verbraucherzentrale provides information about health insurance for pensioners and how to insure yourself in retirement.
Das Statistische Bundesamt (Destatis) provides statistics on health insurance coverage in Germany.
FAQ
Which contributions of my private health insurance can I specifically deduct as a retiree?
As a retiree, you can deduct the portion of your private health insurance contributions that serves as basic coverage (comparable to the statutory health insurance level). Additionally, the complete contributions to compulsory long-term care insurance are deductible. For other precautionary expenses, including optional benefits, a maximum amount of 1,900 euros applies, unless this is already exhausted by the basic contributions.
How does the pension insurance subsidy affect the tax deductibility of my private health insurance contributions?
The subsidy from the German Pension Insurance for your private health insurance contributions is tax-free. However, it reduces the amount of contributions you can claim for tax purposes.
Do I need to calculate the deductible private health insurance contributions myself?
No, your private health insurance determines the share of basic coverage and electronically transmits this data to the tax office. You will receive a certificate with the relevant amounts for your tax return (Annex Vorsorgeaufwand).
What about private health insurance premium refunds?
Refunds of contributions from your private health insurance reduce your deductible special expenses in the year they are received. They must be declared in the tax return.
Can I, as a retiree, also deduct costs for a single room or specialist doctor treatment?
Costs for optional services like private rooms or treatment by the head physician can only be deducted if the annual maximum amount for other preventive expenses of €1,900 has not yet been reached through your contributions to basic health and long-term care insurance.
Where can I find the legal basis for the deductibility of private health insurance contributions?
The legal basis for the tax deductibility of contributions to health and long-term care insurance is § 10 of the Income Tax Act (EStG), significantly shaped by the Citizens' Relief Act.
