8.71 million people in 2023, voluntarily or at the time had no other choice, but to be privately insured by a German health insurer, the so-called "Private Krankenversicherung (PKV)".
With just 36 the number of providers in 2024 has slightly shrunk and therefore remains manageable. However, finding the most suitable product amongst the vast range of different and non-transparent plans, and then acceptance because of one's personal circumstances, is like taking a walk through the jungle - without the right tools you will get stuck, and with inadequate advice & guidance private health insurance pitfalls are costly! Yet, once on the right path, being in possessing of private health insurance is the most comforting feeling when seeking medical treatment, especially it situations when it really matters.
What German private health plans cover
German private insurers operate according to the equivalency principle, meaning premiums are calcualted in such a way that they cover the costs of the insured services. In other words, those who are willing to pay higher premiums for their private health insurance will also receive more benefits and better service in return.
Both tariffs Medical” (inpatient, outpatient & dental treatment) along with “Mandatory Long-term Care” make up the main construct of a German private health policy, referred to as “Krankheitskostenvollversicherung”. There is no one-to-one English translation but it should be understood as "comprehensive health insurance".
Although cover is generally extensive, this however does not imply that all costs are reimburseable, as treatment of a symptom ...
- must be medically necessary,
- with the purpose to cure' or
- carried out due to illness/ accident.
In addition to the above, the policy can be extended with the following optional benefits, which are considered as separate contracts, hence can be added or removed without affecting the main insurance construct.
One other benefit, which German health insurers call "Optionstarif", allows a switch on renewal to a different plan without having to undergo a new medical examination. This is highly recommendable to a person who has been accepted with a more serious pre-existing condition and needs the possibility to switch to better coverage, should future medical enhancements make curing treatment possible.
Restricted and Unrestricted Remedy- & Medical Aid catalogues
When it comes to reimbursements for remedies or medical aids, most German health plans pay such costs based on whether or not the specific product is listed in their catalogue and when it is, they proceed by implementing additional terms.
These can be: a deductible, reimbursement ceiling, if just the very basic version is insured, or even whether or not the same item has already be reimbursed for that calendar year.
Insurers offering cheaper plans use so-called restricted Remedy- & Medical Aid catalogues and most people never realise this until they have to use the insurance! Here a few cost examples:
The consquences of a restricted catalogue
An extreme demonstration of what happens when a health plan has reimbursement-ceilings, is when people lose a limb. Instead of receiving a myoelectrical controlled prosthesis that can cost up to 50,000€, people have to settle with basic versions, the ones classed "medical necessary", ranging between 500€ to 6,000€.
Luckily, more common are the cases in which a person requires a wheelchair, however nowadays there are big differences.
The costs for a basic wheelchair start at 150€, a standard one can be obtained as of 750€, yet should you prefer to use mechanical assistance to e.g. comfortably move in either direction, brake and overcome slopes of 18% and more, then 4,000€ is not unrealistic.
Understanding the private medical billing method system - 'Scale of Fees'
Whereas members of the Germany statutory ("public") system simply show their membership card and from then on need not worry about charges, private patients are legally the receipient of invoices, consequently generally the responsible party to settle these. An exception is when admitted to hospital, as then the accounting department will ask the patient to sign a declaration in which they waive their right to receive reimbursement from the insurer. Also, some German private health insurers offer direct billing for outpatient treatment, yet this handling is in its infancy.
This raises the question what happens should there ever be a discrepancy between the physician's invoice and insurer's reimbursement. Apart from that reimbursements depend on contractual terms - insured benefits - an often sensitive topic is the 'Scale of Fees' for doctors and dentists, which all physicians must abide by and are passed by the Federal Government.
Practically physicians bill private patients on a catalogue-based listing of all treatments.
Every position in this catalogue is given a base value and multiplied by a factor a physicians are free to decide on.
There are two factor-zones with the 'Scale of Fees'
- Zone A – Standard
- Factors range between 1 to 2,3
- Zone B – Extended
- Factors range between 2,4 to 3,5 with latter being the maximal permitted
- Using these factors requires specific justification of increased treatment/ efforts to be recognised as conform within the ‘Scale of Fees’
Besides the 'Scale of Fees', should physicians see it medical necessary and justifiable, they can charge above the ‘Scale of Fees’ and usually without asking for reassurance that the patient's insurer will reimburse. A rare scenario when receiving outpatient treatment yet quite common when admitted to hospital, and only after submitting the invoice to the insurer people become aware that their head physician ‘top notch’ care is not covered by their German private health plan.
Additionally to the above, health insurers do consider decisions made by the 'Central Consultation Committee for Fees', which is part of the German Medical Association.
