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Topic Consumer protection Private health and compulsory long-term care insurance

Everyone who has their place of residence in Germany is required to take out health and long-term care insurance, either under the statutory or the private insurance system.

In the private health insurance system, contributions have to be paid for every insured person. The amount of these contributions is determined based on the age and health of the insured person when they take out the insurance policy, and based on the policy conditions or tariff chosen. Risk-adjusted contributions are calculated using actuarial principles. The increased healthcare needs in old age are taken into account by means of a provision for advancing age. The capital funding method of calculation (Anwartschaftsdeckungsverfahren or Kapitaldeckungsverfahren) is based on the assumption that costs in the healthcare sector will not rise and that the contributions will not increase simply due to the insured person’s advancing age.

It is normally possible to switch private health insurer at the end of the policy year. It should be noted that health insurers – with the exception of insurance in the basic tariff – are not obliged to accept applications for insurance. The new insurer will carry out a health check, and the contributions will be charged according to the age of the insured person. A portion of the provision for advancing age calculated can be transferred to the new insurer. There are special rules for persons who were insured privately before 1 January 2009. If the policyholder takes out supplementary insurance, then the remaining portion of the provision for advancing age can be counted towards the contributions for this supplementary insurance; otherwise, it remains with the community of policyholders belonging to the old policy. As a general rule, it is not possible to return to the statutory health insurance system, particularly in old age.

In the statutory health insurance system, the principle of solidarity applies. This means that contributions are normally measured as a percentage of the insured person’s income. Under certain conditions, the spouse or children of a policyholder can be insured without paying contributions.

Who needs private health insurance and private compulsory long-term care insurance?

Anyone who has their place of residence in Germany and is not covered by compulsory or voluntary statutory health insurance must take out private health insurance (private Krankenversicherung). This typically includes civil servants (Beamte) alongside freelance workers and those who are self-employed. Salaried employees whose income has exceeded an annual threshold for at least twelve months may also choose to take out private health insurance. You should seek out detailed advice before switching to private health insurance.

In Germany, long-term care insurance is also obligatory. As a general rule, if you have private health insurance, you are obliged to take out private compulsory long-term care insurance (private Pflegepflichtversicherung).

What benefits do private health insurance and private compulsory long-term care insurance provide?

As a counterpart to statutory health insurance and social long-term care insurance, private comprehensive health insurance and private compulsory long-term care insurance cover, within the contractually agreed scope, the costs incurred by the insured through the occurrence of insured events. This includes the costs for medically necessary treatments in the event of illness or accident, alongside other agreed benefits, in addition to the costs of care. This kind of insurance is provided by private health insurers.

Private health insurance reimburses the costs of medically necessary treatment as a result of accident or illness. Different insurers offer a range of different policies. This ranges from basic protection to comprehensive insurance with additional benefits that are usually not provided by statutory health insurance. The amount reimbursed and the scope of expenses covered depend on the conditions of your individual policy.

Before the insurer pays for treatment, they determine whether it was medically necessary. In some cases, the opinion of the healthcare provider (for example the doctor treating you) differs from the opinion of the insurer and – in the case of civil servants eligible for government aid for the costs of medical treatment and care (Beihilfe) – from the opinion of the responsible office. It is therefore a good idea to first obtain pre-approval from your insurer before starting any extensive or expensive treatments. You have a right to this information from your insurer if the costs of your planned treatment are expected to exceed €2000.

As with the continuation of wages provided for by the statutory health insurance system, it is possible to protect yourself against a loss of wages resulting from illness with daily benefits insurance in addition to your private health insurance.

If you require care, private compulsory long-term care insurance covers the cost associated with at-home or outpatient care, depending on the degree of care required, to the extent agreed in your insurance contract. It is also possible to receive a care allowance. The benefits provided by compulsory long-term care insurance correspond to social care insurance. If social care insurance provides a specific benefit to those in need of care, then compulsory long-term care insurance normally covers the same costs for those with private care insurance. The equivalence of benefits is guaranteed by law. For this reason, however, compulsory long-term care insurance does not usually cover all of the costs that arise when care is required. Private supplementary care insurance can fill in any gaps.

Depending on the policy conditions and the insurer, there can be significant variations in the benefits provided by private health insurance and private supplementary care insurance. You should therefore start by considering the scope of insurance cover you require before doing extensive research and seeking out expert advice.

What are my obligations as a policyholder or insured person?

  • You are required to pay your insurance contributions on time.
  • Pre-contractual disclosure obligations: before you can take out private health and compulsory long-term care insurance, your insurer will ask you questions about your health as part of your application. You must answer these questions truthfully and in full. If you provide incorrect or incomplete information here, your insurer may have the right to contest the contract retrospectively, going back to the date on which it was concluded. This would result in you losing your insurance coverage. Furthermore, you may also have to repay any benefits provided for treatments of illnesses in relation to which you provided false information when questioned about your health. In this case, the insurer also has the right to keep any contributions already paid.
  • Obligations when benefits are provided: you may be required to submit medical documents requested by your insurer. Furthermore, you are also required to consent to a medical examination, if necessary.
  • Additional obligations incumbent on the policyholder or insured person are contained in the sample terms and conditions for healthcare insurance and daily hospital allowance insurance (Musterbedingungen für die Krankheitskosten- und Krankenhaustagegeldversicherung (MB/KK)), in the sample terms and conditions for private compulsory long-term care insurance (Musterbedingungen für die private Pflegepflichtversicherung (MB/PPV)), and in the policy conditions set out by the various insurance companies.

Where can I take out private health insurance and private compulsory long-term care insurance?

You can take out private health insurance and private compulsory long-term care insurance with the insurer (for example in a branch or online). You can also contact an insurance intermediary (insurance broker or insurance agent).

Seek out detailed advice before taking out private health insurance. There may be significant differences between providers.

How much does private health insurance and private compulsory long-term care insurance cost?

The contributions for private health insurance and private compulsory long-term care insurance depend on various factors. They are determined by your age and health, and, in the case of health insurance, also by the benefits you choose. When comparing policies, carefully review exactly what benefits are offered and consider the insurance cover you want. You should also consider what illnesses are excluded from the insurance cover alongside the risk premiums charged and their amounts.

If policyholders do not fall under the health insurance obligation and previously did not have (sufficient) health insurance cover, insurers are entitled to demand a premium supplement. This corresponds to one month’s contribution for each month of non-insurance commenced; from the sixth month of non-insurance, it is reduced to one-sixth of a month’s contribution for each further month of non-insurance commenced.

The costs of contributions for private health insurance and private compulsory long-term care insurance may also be tax-deductible.

What information is the health insurer required to provide?

The insurer must provide you with the following information:

  • Insurance product information document: this contains the most important information about your policy in a compact format and includes, for example, details of your insurance protection, contributions and termination periods.
  • Customer information: you must receive information about the insurer, the services provided, the contract and available legal protections. In the case of substitutive health insurance, the insurer must provide information about the amount of costs included in the calculation of your contributions, in addition to other costs, in particular one-time costs or costs that may arise for particular reasons. Acquisition costs included in this calculation have to be stated as a single sum. Furthermore, administrative costs must be shown separately.
  • General insurance conditions for health insurance and daily hospital allowance insurance, and for private compulsory long-term care insurance (Allgemeine Versicherungsbedingungen für die Krankheitskosten- und Krankenhaustagegeldversicherung and Allgemeine Versicherungsbedingungen für die private Pflegepflichtversicherung).

How can I cancel or change my private health insurance or compulsory long-term care insurance?

In Germany, health insurance is mandatory. If you change health insurance provider, you must therefore ensure that there are no gaps in your health insurance cover. You may only terminate your health insurance once you have taken out a new policy that meets the requirements for compulsory insurance. You must therefore take out new insurance in good time. If you terminate a private health insurance contract, the termination will only become effective if you can prove, within two months of submitting your notice of termination, that you are insured by a new insurer without interruption. If the date on which you wish to terminate your old policy is more than two months after you submit your notice of termination, proof of insurance must be provided by this date.

Depending on when your policy started, private health insurance can be terminated at the end of the calendar year or at the end of the policy year. A notice period of three months must be observed. It is possible to terminate insurance for each insured person individually, or to terminate specific tariffs only.

Bear in mind that there are specific procedures for terminating a health insurance policy if

  • the insured person becomes subject to compulsory insurance in the statutory health insurance system, or
  • the contributions are raised because the insured person has reached a certain age or other conditions set out in the contract have been met, or
  • the insurer increases the contributions or reduces benefits on the basis of an adjustment clause.

If you want to switch insurer, it is possible for part of the provision for advancing age to be transferred to the new insurer. This only applies to policies taken out after 1 January 2009.

As a rule, ordinary termination by the insurer is not possible where the policy in question has been taken out by the insured to comply with the general insurance obligation. The insurer only has a right of termination in exceptional cases.

Compulsory long-term care insurance can be terminated by the policyholder if the (applicable) insurance obligation ends or if insurance cover is provided by another insurer. Retrospective termination of compulsory long-term care insurance to the date on which the insurance obligation ends is only possible within two months from that date. After this period, the policyholder can only terminate compulsory long-term care insurance at the end of the month in which they provide evidence that the insurance obligation has ended.

As long as the general statutory insurance obligation applies, the insurer does not have the right to terminate compulsory long-term care insurance.

Can I change tariff with my health insurer?

As a general rule, it is possible to switch to a different tariff with the same insurer. This might be particularly important to you if you want to change your monthly insurance contribution or if you wish to increase your insurance coverage. In the case of an existing insurance agreement, as the policyholder, you have the right to demand that the insurer accept your application to change to another tariff with equivalent insurance cover and that the rights acquired under the contract and provision for advancing age be taken into account. In such cases, health insurance companies are obliged to provide the policyholder with comprehensive advice. In particular, they must inform the policyholder about suitable tariffs to switch to.

If the benefits provided in the tariff you wish to change to are higher or more comprehensive than in your previous tariff, the insurer can exclude certain benefits or require an appropriate risk premium in addition to a qualifying period. The insurer may also carry out a health check. You can avoid a risk premium, qualifying period and health check by agreeing to the exclusion of the additional benefits.

How are private health insurers supervised?

BaFin supervises German insurance companies and monitors all of their business operations. BaFin’s responsibilities include ensuring that the legal and financial interests of all insured persons are adequately protected. In order to protect the interests of all consumers, BaFin accepts and processes complaints about specific insurance undertakings. However, BaFin cannot enforce your rights as an individual. That is the responsibility of the courts.

BaFin is also not responsible for determining whether individuals are subject to an insurance obligation in the private or statutory health insurance system.

Furthermore, BaFin does not make any decisions as to whether foreign health insurance satisfies the requirements of the statutory health insurance obligation in Germany or whether the legal requirements for health insurance contribution subsidies, which are paid to employees by their employer, are met. BaFin also does not issue attestations to this effect.

The quality and contents of insurance policies and the tariffs offered are not subject to review by BaFin. However, private health insurers and compulsory long-term care insurers must notify BaFin if they intend to introduce new general insurance policy conditions and tariff conditions (Allgemeine Versicherungs- und Tarifbedingungen), or if they intend to change existing terms and conditions.

Under the principle of contractual freedom, insurers are free to decide whether they wish to enter into a private health insurance agreement, in addition to the scope of cover they wish to offer. This does not apply to the basic tariff. Here the insurer is obliged to accept the policyholder, provided the relevant conditions are met.

If BaFin determines that insurance terms and conditions are in breach of the law (in particular consumer protection law) or (high) court decisions, it can take measures to remedy or prevent such shortcomings.

Where can I find more detailed information?

You can get further information:

  • from insurance companies, who can provide information about the specific contractual terms and the scope of insurance cover they offer;
  • from local consumer advice centres and other consumer protection organisations – contact details can be found on the website of the consumer advice centre (Verbraucherzentrale);
  • on the website of the Association of Private Health Insurance Companies (Verband der privaten Krankenversicherung e.V.);
  • and in specialist media.

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