Private health insurance for retirees: How to maximise your tax savings
06.05.25
7
Minutes
Katrin Straub
Managing Director at nextsure
Many retirees are unsure how they can claim their private health insurance contributions for tax purposes. This article explains precisely which amounts are deductible and how you can effectively reduce your tax burden. Discover practical recommendations for your situation.
The topic in brief and concise terms
Pensioners can claim tax deductions for contributions towards the basic cover of their private health insurance and the full mandatory long-term care insurance, subject to a maximum amount of EUR 1,900 for other provision expenses.
Additional benefits of private health insurance are only tax-deductible if the maximum amount of €1,900 has not yet been exhausted by the basic contributions.
Insurance companies report deductible contributions electronically to the tax office; the details are provided in the supplementary annex for pension expenses.
Quick Facts: Private health insurance contributions for pensioners and tax
For pensioners with private health insurance, tax deductibility is an important factor in easing the financial burden. Contributions to basic cover, comparable to the level of benefits provided by statutory health insurance (GKV), are fully deductible. You can also claim the contributions to private compulsory long-term care insurance in full.
Here are the key points on the tax deductibility of private health insurance for pensioners:
Basic cover fully deductible: The portion of your private health insurance contributions that provides basic cover reduces your taxable income in full.
Compulsory long-term care insurance: Contributions to this are always 100 per cent deductible.
Maximum amount for other pension expenses: For pensioners, as for employees, an annual maximum amount of 1,900 euros applies to other pension expenses.
Pension insurance subsidy: This subsidy to your private health insurance is taken into account when calculating the deductible contributions.
Additional benefits: Costs for optional services (e.g. consultant physician, single room) are only deductible if the 1,900-euro maximum has not already been used up by the basic contributions.
Notification to the tax office: Your insurer automatically transmits the relevant data.
These regulations help to reduce your financial burden in later life. The next section looks at, in practical terms, how these rules specifically affect you.
Practical check: Understanding deductible contributions and upper limits
The contributions to private health insurance often consist of amounts for basic cover and optional or additional benefits. For pensioners, it is crucial that the basic cover is usually fully recognised for tax purposes. This includes benefits corresponding to the level of statutory health insurance. Your private long-term care insurance is also fully tax-deductible.
The maximum amount for other pension expenses is €1,900 per year for pensioners. If your contributions to basic health and long-term care insurance already reach or exceed this amount, no further pension expenses (such as for accident or liability insurance) can be claimed for tax purposes. For example: if your deductible basic portion already amounts to €2,000, the maximum amount of €1,900 is exceeded. The costs of your private health insurance can therefore directly reduce your tax burden. The German Pension Insurance scheme pays you, as a pensioner with private insurance, 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 check your insurer's annual certificate carefully, as it lists the amounts relevant for tax purposes. This information is crucial for your tax return and correct completion. In the following, we go into greater detail on the statutory basis and expert tips.
In-depth expertise: legal foundations and optimisation approaches
The tax deductibility of contributions to private health insurance is governed by Section 10 of the Income Tax Act (EStG), significantly influenced by the Citizens’ Relief Act. This Act ensures that expenses for basic healthcare provision are taken into account for tax purposes. For pensioners, this means that the portion of PKV contributions that covers basic protection is deductible as special expenses. Your private health insurance calculates this portion and reports it directly to the tax office together with your tax identification number. You will receive a certificate for your records.
Our expert tip: Check whether prepaying your PKV contributions for up to three years could bring tax advantages. This can be particularly worthwhile if your income is higher in one year and you therefore fall into a higher tax rate. Such an advance payment can maximise deductible special expenses in a given year. However, please note that premium refunds reduce your deductible provision expenses in the year they are received. These must be stated in your tax return. For the exact entry of insurance policies in the tax return, the Vorsorgeaufwand schedule is relevant. Let us now clarify which specific steps you need to consider in your tax return.
Step-by-step: private health insurance contributions in the tax return for retirees
Accurately declaring your PKV contributions in your tax return is crucial to fully make use of the potential tax advantages as a pensioner. Fortunately, much of the work is taken off your hands by your insurer’s electronic transmission of data to the tax office. Nevertheless, it is important to check the certificates you receive and to reconcile the figures in your tax return in the Vorsorgeaufwand annex.
Here’s how to do it:
Check the insurer’s certificate: Your private health insurance sends you an annual certificate showing the amount of the contributions paid in the previous year that are tax-deductible for health and long-term care insurance. This includes a breakdown into basic cover and any additional benefits.
Vorsorgeaufwand annex: Enter the certified figures in the relevant lines of the Vorsorgeaufwand annex to your income tax return. The line numbers can change slightly from year to year, so use the field labels as your guide.
Pension insurance subsidy: The subsidy paid by the German Pension Insurance to your PKV is usually already taken into account by the insurer when calculating the deductible contributions, or it must be shown separately.
Declare premium refunds: Any premium refunds you receive reduce your deductible expenses and must also be declared in the Vorsorgeaufwand annex.
Other precautionary expenses: If your contributions to basic health and long-term care insurance do not use up the maximum amount of 1,900 euros, you can enter additional insurance policies here (e.g. liability or accident insurance) until the maximum amount is reached.
Careful completion ensures you secure the maximum tax saving. With this knowledge, you can also use the advantages of your private insurance for tax purposes. But what happens to contributions for optional benefits?
Optional benefits and excesses: what pensioners can additionally deduct
In addition to the contributions to basic cover, private health insurance often also involves costs for optional benefits. These include, for example, treatment by the chief physician, a single or double room in hospital, or high-quality dental prostheses. As a rule, these additional benefits are not part of the tax-relieved basic cover. However, they can be claimed as „other precautionary expenses“ for tax purposes, provided the annual maximum amount of EUR 1,900 for pensioners has not already been exhausted by contributions to basic health and long-term care insurance. In practice, however, this leeway is already used up by basic costs for many pensioners. Your PKV in retirement often offers comprehensive cover.
Excesses, i.e. the share of medical costs that you bear yourself before the insurance pays out, are not deductible as precautionary expenses. However, under certain circumstances they can be claimed as exceptional expenses if they exceed the reasonable burden threshold. This also applies to co-payments for medicines or costs for spectacle lenses that were not reimbursed by the PKV. Please note that the reasonable burden is calculated individually and depends on your income, marital status and number of children. A careful review and the collection of all supporting documents are essential here. Knowing these details helps you get the most out of your tax return. Now we summarise the most important points for you.
Summary and your next step towards tax optimisation
The tax deductibility of private health insurance offers retirees a valuable way to reduce their financial burden. The key distinction here is between the fully deductible basic cover and the only limited deductible optional benefits. The maximum amount of EUR 1,900 for other pension expenses plays an important role. Contributions to long-term care insurance are always 100% deductible. The insurers’ electronic reporting simplifies the process; nevertheless, it is essential to check the certificates yourself and enter the information correctly in the pension expenses schedule.
Please remember that premium refunds are also tax-relevant and reduce your deductible expenses. Precise knowledge of the rules and careful documentation are the key to making the most of the tax benefits. Private health insurance can therefore also create financial freedom in later life. If you would like to review your individual situation and identify potential optimisation opportunities, we will be happy to help.
More useful links
The Association of Private Health Insurance provides information on private health insurance for retirees in Germany.
German Pension Insurance provides information on health and long-term care insurance for retirees.
The Bavarian Pension Chamber provides information on tax and social insurance for retirees.
German Pension Insurance offers a brochure with information on tax law for insured persons and retirees (PDF).
The Federal Ministry of Finance provides a document on data exchange between private health/long-term care insurance and tax authorities/employers (PDF).
The Consumer Advice Centre provides information on health insurance for retirees and how to insure yourself in retirement.
The Federal Statistical Office (Destatis) provides statistics on health insurance coverage in Germany.
FAQ
Which contributions to my private health insurance can I specifically deduct as a pensioner?
As a pensioner, you can deduct the portion of your PKV contributions that serves basic cover (comparable to GKV level). In addition, the full contributions to mandatory long-term care insurance are deductible. For other retirement provision expenses, including optional benefits, a maximum amount of EUR 1,900 applies, provided this has not already been used up 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 towards your private health insurance contributions is tax-free. However, it reduces the amount of the contributions you pay that you can claim for tax purposes.
Do I have to calculate the tax-deductible private health insurance contributions myself?
No, your private health insurance provider determines the proportion of basic cover and transmits this data electronically to the tax office. You will receive a certificate with the relevant amounts for your tax return (Annex Vorsorgeaufwand).
What about premium refunds from private health insurance?
Premium refunds from your private health insurance reduce your deductible special expenses in the year in which they are received. They must be declared in the tax return.
As a pensioner, can I also claim the costs for a single room or treatment by the consultant physician as tax deductions?
Costs for optional benefits such as a single room or treatment by the chief physician are only deductible if the annual maximum amount for other precautionary expenses of 1,900 euros 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 tax deductibility of private health insurance contributions?
The legal basis for the tax deductibility of contributions to health and long-term care insurance is Section 10 of the Income Tax Act (EStG), significantly shaped by the Citizens’ Relief Act.
