BaFin

Questions & answers on health insurance

What is private health insurance, and what is statutory health insurance?

In Germany private health insurance (PHI), in contrast to statutory (or state) health insurance (SHI), provides coverage with an insurance company organised under private law for costs arising from sickness or accidents or as a result of diagnostic health measures.

SHI, along with pension, unemployment, accident and long term care insurance, forms an integral part of the German social security system and Germany’s healthcare system.

In Germany, persons not subject to mandatory SHI cover (employees whose income in the last three years – or, as of 31 December 2010, the last 12 months – has been above the annual earnings threshold (a particular amount fixed by law); also civil servants, self-employed persons and freelancers) may take out healthcare insurance under PHI.

In PHI, premiums are assessed on the basis of the individual’s personal health risk profile consisting of criteria such as age, gender and state of health. Under SHI, on the other hand, premiums are calculated using a fixed contribution rate dependent on the individual’s personal income.

Benefits under PHI vary depending on the company and the rate. Benefits under SHI are laid down in the Fifth Book of the German Social Security Code (Fünftes Buch – Sozialgesetzbuch – SGB V) and are normally provided by the health insurance funds in accordance with the principle of benefits in kind.