Mitigating the Impact of Premium Increases by Private Insurers
Privately insured individuals in Germany are facing hefty premium increases of up to 30%, thanks to a variety of factors. These include rising claim costs, which have risen by an average of 13.5%, and the difficulty insurers are experiencing in attracting new clients due to growing doubts about the sustainability of the private health insurance system.
Approximately two-thirds of the 8.7 million fully insured individuals can expect a 18% increase. However, some might have to pay up to 30% more, as reported by Süddeutsche Zeitung.
Switching Insurance Policies within Private Health Insurance
While the political landscape may remain uncertain, private health insurance policyholders can already save on their premiums by switching to a different policy offered by their provider. Sometimes, the same coverage can be obtained for significantly less money by switching to a different tariff with the same insurer. A simple inquiry with your provider might save you several hundred euros per month. In theory, insurers are obligated to inform their customers about this option when premiums increase.
However, long-term policyholders should not switch to another insurance company due to high premiums as it could lead to the loss of accumulated age-related reserves, making the new policy extremely expensive in the long run.
Fortunately, under Section 204 of the Insurance Contracts Act, policyholders have the right to switch to a different tariff within their own insurance company with equivalent coverage at any time. This allows policyholders to retain their age-related reserves and avoid a new health check, as long as the new contract's benefits are not higher.
Every time the insurer increases the premium, they must inform customers of cheaper alternatives. Consumer advice centers recommend that customers ask their insurance company to provide offers for switching to all suitable tariffs under Section 204. However, there have been reported issues when policyholders try to exercise their statutory right to switch tariffs.
Lower Cost Alternatives
If the premium burden is still too high, policyholders can switch to a basic tariff with their own insurance company. This provides the same level of benefits as statutory health insurance, as mandated by law. This can nearly halve the burden in cases of high premium payments, but at the cost of reduced benefits. This option is only available to those who have been privately insured since 2009, or those who were members before 2009 as long as they are at least 55 years old, receive a pension or are in need of care as defined by social law. In the basic tariff, insured persons pay a maximum of the same premium as statutory health insurers (up to 1050.53 euros per month - insured persons with children pay a slightly lower premium).
Alternatively, those who can no longer afford their contributions can switch to a standard tariff. The policyholder must have been privately insured for at least ten years, be at least 55 years old and earn less than the current 62,100 euros per year, or be at least 65 years old and receive a pension below the contribution assessment threshold. The average monthly costs for this, according to the PKV association, are around 400 euros, making it roughly half the price of the basic tariff.
Switching to another Insurance Company
Those who wish to switch to another private insurance company can cancel their old contract within two months of receiving the premium increase. However, the insured person must then usually expect a new health check and the loss of any age-related allowances.
Subsidies for Pensioners
Pensioners who are privately or voluntarily insured can receive a contribution subsidy from the statutory pension insurance. However, this must be applied for. The amount depends on the individual pension amount, the general contribution rate of the statutory health insurance and the additional contribution of the own health insurance company.
Returning to Statutory Health Insurance
Some may also want to return to the protection of the statutory health insurance (GKV). However, switching to statutory health insurance is not open to all privately insured persons. Employees who earn less than 56,250 euros (annual earnings limit) can switch back. Those who earn more can reduce their working hours, take a sabbatical, or, if the gross salary is only slightly above the mentioned annual earnings limit, also pay into the company pension scheme. This also reduces the gross salary. Even those who become unemployed can return to the protection of the statutory health insurance.
Self-employed persons have it much harder. The cessation of entrepreneurial activity is required for this. Those who give this up can be insured through their spouse's family insurance or register as unemployed. If the opportunity arises, a switch to an employee relationship should be considered.
However, a return is only possible if the insured person is under 55 years old. For those over 55, this is only permitted if they have been insured by statutory health insurance for at least one day in the last five years. However, there is no way back into statutory health insurance for those who are already retired.
In light of the premium increases, privately insured individuals might consider exploring alternative health insurance policies within their current provider, as stated in Section 204 of the Insurance Contracts Act, to retain their age-related reserves and potentially save money. However, switching to another insurance company could result in a new health check and the loss of accumulated age-related reserves.
Policyholders who are eligible can switch to a basic tariff within their own insurance company, which provides the same level of benefits as statutory health insurance, nearly halving the premium burden in some cases. However, this comes at the cost of reduced benefits.
