Pension and private health insurance: Optimise costs, make use of benefits
14.05.25
4
Minutes
Katrin Straub
Managing Director at nextsure
Many retirees with private health insurance are concerned about rising premiums in later life. However, there are numerous ways to reduce the cost of your private health insurance in retirement and to tailor your cover optimally. Find out here how you can make use of subsidies, optimise your plan and claim tax advantages.
The topic in brief and concise terms
Privately insured pensioners can receive a subsidy towards health insurance from the pension insurance scheme, which must be applied for.
An internal tariff switch under Section 204 of the German Insurance Contract Act (VVG) is an effective way to lower private health insurance premiums in later life without losing any ageing reserves.
Contributions towards the basic cover of private health and long-term care insurance are tax-deductible as provision expenses.
Understanding contribution levels in private health insurance for retirees
Contributions to private health insurance (PKV) are generally independent of income in retirement. Unlike statutory health insurance (GKV), the level of your retirement income plays no direct role in the calculation of contributions. Many pensioners benefit from certain contribution components falling away: from the age of 60, the statutory surcharge of ten per cent no longer applies. On retirement, the need for sickness benefit insurance also usually ends, which further reduces the premium. The average PKV contribution for adults without entitlement to employer assistance was €535 per month in 2023. It is important to analyse your own contribution situation at an early stage. These factors have a significant impact on your future costs.
Secure a subsidy for private health insurance from the pension insurance provider
As a privately insured pensioner, you are entitled to a subsidy towards your health insurance contributions from the statutory pension insurance scheme. This subsidy must be applied for proactively, ideally together with your pension application. The amount of the subsidy is based on the general GKV contribution rate (currently 14.6 per cent) and the average additional contribution rate charged by health insurers. Privately insured individuals currently receive 8.55 per cent of their gross pension as a subsidy (half of 14.6 per cent plus half of the average additional contribution of 1.7 per cent; as of 2024, this may vary slightly depending on the source; here, 1.25% was used in the source, resulting in 8.55%). However, the subsidy is limited to half of your actual private health insurance contributions. For a pension of, for example, 1,000 euros gross, you could therefore receive a subsidy of up to 85.50 euros. Please note that no subsidy is paid towards contributions for private long-term care insurance. The health insurance for pensioners provides further details here.
Actively reduce premiums: check tariff changes and other options
There are several ways to optimise the premiums of your private health insurance in retirement. A very effective method is switching tariff within your insurance company in accordance with Section 204 of the Insurance Contract Act (VVG). This right guarantees you the switch to a cheaper tariff with comparable benefits, taking into account your accumulated age reserves. Savings on premiums of up to 43 per cent are often possible.
Further options for reducing premiums are:
Reviewing and, if necessary, increasing the excess.
Switching to an annual payment method for premiums, which is often associated with a discount of three to five per cent.
Switching to the standard or basic tariff, provided the requirements are met and this is the appropriate solution. The standard tariff is open to policyholders who joined private health insurance before 2009, have been insured there for at least ten years, and meet certain age or income limits.
Using premium relief tariffs, if these were taken out at an early stage.
Many policyholders are not aware of their right to an internal tariff switch under Section 204 VVG and therefore pay unnecessarily high premiums. Advice can reveal individual savings potential here. The costs of private health insurance can thus be actively managed.
Tax benefits: deduct private health insurance contributions
Contributions to private health and long-term care insurance can be claimed for tax purposes as retirement provision expenses. The deductible portion is the part that serves basic cover, i.e. benefits at the level of statutory health insurance. Your insurer informs you annually of the amount of deductible contributions, which you enter in the “Retirement provision expenses” schedule of your tax return. For employees and retirees, the maximum amount for retirement provision expenses is EUR 1,900 per year; for the self-employed it is EUR 2,800. These amounts double for married couples assessed jointly for tax purposes. Correctly declaring this in your tax return can significantly reduce your tax burden. Also find out more about the tax deductibility as a pensioner in detail. Any premium refunds received must also be declared in the tax return, as they reduce the deductible special expenses.
Switching to statutory health insurance: An option for a few retirees
A switch from private back to statutory health insurance (GKV) is only possible for pensioners under very strict conditions. In general, a switch from the age of 55 onwards is severely restricted. An important requirement for entry into the health insurance for pensioners (KVdR) is that, in the second half of your working life, you were insured under statutory health insurance for at least nine-tenths of the time. Since a legislative change in 2017, three years of insurance time in the GKV are credited per child as a flat rate, which can improve the chances of switching. Another option may be family cover through a spouse, provided their income thresholds are not exceeded (maximum total monthly income of 505 euros or 538 euros for a mini-job, as of 2024). A switch should be carefully considered, as returning to the PKV later is often no longer possible and the GKV can also involve cost traps in old age, for example with voluntary insurance. The health insurance obligation for a private pension is a complex topic.
In-depth expert insight: legal foundations and design tips for your private health insurance in later life
For privately insured retirees, several paragraphs and regulations are of particular importance. The aforementioned § 204 VVG is the key instrument for optimising premiums through an internal tariff switch. It secures your right to switch to another tariff with the same insurer without a new health assessment and while taking all ageing provisions with you, provided the new tariff does not include any additional benefits. If additional benefits are included, a health assessment may be carried out for these. Another important aspect is the formation of ageing provisions during the term of the contract. These are intended to cushion rising healthcare costs in old age. From the age of 60, the statutory surcharge of ten per cent, which served to build up these provisions, no longer applies, resulting in direct premium relief. Our expert tip: Have your contract situation reviewed by an independent specialist at least every three to five years. There are often newer tariffs with a better price-performance ratio, or your needs may have changed. A private health insurance policy should remain flexible. Also pay attention to the regulations on premium adjustments in your insurance conditions. These must be transparent and comprehensible.
To keep the contributions for your private health insurance stable and affordable in retirement over the long term, forward-looking planning is essential. Even at a younger age, you can lay the foundations. Taking out a contribution relief tariff (BEA) is one option for receiving a fixed subsidy towards the premium from an agreed age, for example 67. These tariffs are state-subsidised. Another strategy is to deliberately choose a tariff with sufficiently high ageing reserves from the outset. The earlier you start making provision for stable contributions in later life, the lower the monthly cost will be. Also consider which benefits are really important to you in later life and whether a tariff with a higher excess is an option in order to reduce ongoing premiums. The combination of private pension insurance and optimised health insurance provides a strong foundation for retirement.
Frequently asked questions about pensions and private health insurance, answered expertly
In connection with private health insurance in retirement, similar questions keep arising. One common question concerns how contributions will develop. As already explained, certain parts of the contribution no longer apply, and there is a subsidy from the statutory pension insurance scheme. Nevertheless, contributions may be adjusted due to rising healthcare costs. Another frequently asked question is whether you can still get out of private health insurance in later life. The hurdles for switching to statutory health insurance are very high for retirees. Many policyholders also ask about benefits in later life. In principle, the benefits contractually agreed in your private health insurance remain in place in retirement too. It is a misconception that insurers are allowed to reduce benefits in later life. Good advice clarifies individual questions and takes your personal situation into account. This is particularly important when it comes to the three pillars of retirement provision and how private health insurance fits into them.
Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive specific suggestions for optimisation.
More useful links
Destatis provides information on health insurance coverage in Germany from a statistical perspective.
The Federal Ministry of Health provides comprehensive information about private health insurance.
The German Pension Insurance provides details on health and long-term care insurance for pensioners.
The PKV Data Portal of the Association of Private Health Insurance Providers offers up-to-date data and statistics on private health insurance.
Stiftung Warentest provides an article on affordable health insurance options for pensioners.
Wikipedia provides a comprehensive overview of private health insurance in Germany.
A press release from German Pension Insurance explains subsidies towards health insurance.
The Federal Ministry of Health explains terms and contributions in private health insurance.
The GDV (German Insurance Association) provides statistics and data on private health insurance 2024.
FAQ
How do my private health insurance premiums change in retirement?
At retirement age, the statutory supplement of ten per cent and the contributions for daily sickness benefit often no longer apply, which can lead to a reduction. The German statutory pension insurance also pays a subsidy. However, premium increases due to rising healthcare costs remain possible. An internal tariff change (§ 204 VVG) can help optimise costs.
What options do I have for reducing my private health insurance premiums as a pensioner?
The most important options are the pension insurance subsidy, an internal tariff change under Section 204 VVG, adjusting the excess, using contribution relief tariffs, or switching to standard/basic tariffs under certain conditions.
Do I also have to pay health insurance contributions on my private pension?
Benefits from a purely private pension insurance policy (the third pillar of retirement provision) usually do not attract any direct health insurance contributions if you are insured under private health insurance (PKV). Contributions to the PKV itself are not income-dependent. The situation is different for occupational pensions or certain forms of the Riester pension if you were insured under statutory health insurance.
What is Section 204 of the VVG and how does it help me as a retiree?
Section 204 of the Insurance Contract Act (VVG) gives you the right to switch, within your private health insurance, to another tariff with equivalent cover. Your accrued rights and ageing provisions remain intact. This is often a very good way to save on premiums in later life without having to change insurer.
Will I lose my insurance cover if I can no longer pay my private health insurance premiums in old age?
No, you do not lose your insurance cover. If you can no longer pay the contributions, you will be transferred to the emergency tariff. This provides a reduced range of benefits at a lower contribution. If you receive social assistance or basic income support, the state may cover the contributions under certain circumstances, often in the basic tariff.
Is a contribution relief tariff worthwhile for retirement?
A premium relief tariff can be a sensible way to make PKV contributions more predictable and lower them in retirement. During the savings phase, you pay an additional contribution which then reduces your regular premiums in later life. Whether such a tariff is worthwhile depends on your individual situation, the point at which you take it out, and the tariff conditions. Early advice is recommended here.
