Private health insurance (PKV) as a cost trap for pensioners often leads to poverty in old age

If a private health insurance policy is taken out, or later changed around five times in a lifetime, the intermediary receives remuneration of around 8 times the monthly premium each time – in the past it could well be double what an insurance company paid for a new customer. It is commonly said that private health insurance is “cheap when you are young – expensive when you are old” – but it is hardly possible to avoid disproportionate premium increases in old age because they are almost inevitable as a result of the statutory calculation rules.


Switching to statutory health insurance (GKV) would then also have the advantage that at the end of life it would be possible to avoid
unnecessary or pointless treatments rarely requires an advance directive. Around 40% of those insured under private health insurance later switch back to statutory health insurance,
mostly as a result of compulsory insurance. This change is not always involuntary – just like remaining in the private health insurance for some, to which even
no longer opens up the possibility of returning to the GKV.


Poverty is no disgrace: PKV premium increase of up to more than 7.5% per year

It is not uncommon for private health insurance premiums to double every ten or twelve years, so that many pensioners, despite any additional benefits they may have, will soon have more
for private health insurance than they receive in pensions after taxes. Admittedly, this is often more a problem of pensions being too low than of them being too high.
PKV contributions. This also affects private pensioners whose pensions today amount to less than 50% of what they received when they took out their insurance.
was once promised – not everyone can claim their insurer for performance here because of embellished advertising.
Similarly, many a compulsory member of a pension chamber whose asset management combined with the all too hesitant correction of excessively high
interest rate hopes and a life expectancy that is too short means that only a fraction of the old-age pension can be expected that has hitherto been provided in the
annual communications has been or will be made. The option, like others, of solving the food problem by containerizing can be
a negative household budget – with an ever increasing proportion of private health insurance costs compared to pensions – will also not solve the problem in the long term.

Rescue via tariff change according to § 204 Insurance Contract Act (VVG)

Who has a PKV full insurance, usually has the greatest difficulty to get an overview of what other tariffs of the previous insurer.
could be available as an alternative, and to compare the services. In this case, the policyholder has a right to change the tariff,
to reduce the monthly costs in individual cases to less than half – he would simply have to name the exact tariff he would like to go to,
which the insurer only likes to point out to healthy new customers. Presenting the advantages and disadvantages in a transparent and comprehensible way is usually of interest to
hardly any intermediary, so that even this often requires advice against separate remuneration. What with the various parts of the ageing provision…
and what effect they have after the change, can only be understood by an actuary, who can solve this mystery for a fee.
but will certainly reveal to the layman.


The fairy tale about the cheap standard tariff in old age

Intermediaries like to reassure private health insurance policyholders that they can switch to the so-called standard tariff in old age – with monthly costs amounting to
of about 100 euros. This tariff must not be confused with the basic tariff, which provides benefits exactly like the statutory health insurance, but
almost always at their maximum contribution. Only for those who have already reached the level of need for assistance in the sense of social assistance,
the premiums are halved in the basic tariff – if the need for assistance nevertheless continues to exist, they are reduced again to a quarter by means of a subsidy.

The standard tariff, to which insured persons can switch at old age until 2008, is a bargain for those who would rather first
wait for the development of a course of the disease before seeing a doctor.
No doctor is generally obliged to treat at the maximum fee rates of the standard tariff – with the exception of genuine emergencies, where there are then
gives a painkiller if necessary, so that the patient can look for a doctor without too much pain, who can treat him privately even at the standard tariff rates.
treated. SHI physicians are only obliged to treat genuine SHI patients.

It is true that the Association of Statutory Health Insurance Physicians (KÄV) has a mandate to ensure the provision of health care. That means that somewhere, by law, there must be some doctor,
who treats at the rates (if necessary, he is employed by the KÄV by the hour) – there, patients can then make a free appointment for sometime in the future.
but should expect a longer journey and ask whether it is advisable to take a German-Korean phrasebook with you, or a
App for the mobile phone. As a rule, on the other hand, you end up paying the bill yourself in order to be treated and half from the insurer.
from the standard rate.
It is quicker to get medical help disguised as a rail traveller in the outpatient clinics attached to the railway station mission, where the waiting time in the waiting room can be extended to
to the treatment or until one gets a soup is sweetened by an obligatory sermon on the topic “Blessed are the poor”. Also a note on this,
that the last mite of the poor widow into the bell-bag of the station mission is counted more than the 100 million endowment of Bill Gates for
charitable purposes, will not be lacking, and will be increased in effect by the fact that all the eyes of those waiting for the soup will be directed towards the patient,
while you hold the bell-bag in front of his nose at a long bar and wait until he has dug out a suitable coin from his purse.
But you might as well limit your retirement planning to digging your own grave.


Voluntary statutory health insurance

The possibility to return to the statutory health insurance is limited. Before the 55th birthday, compulsory insurance must be taken out with
of a GKV, and then have existed for at least 12 months. This occasionally requires a salary sacrifice so that the income
does not exceed the contribution assessment ceiling and, of course, the organisation or exercise of the professional activity as dependent employment.


Short statutory GKV compulsory insurance is sufficient as an exception

However, you can also get compulsory GKV insurance by drawing unemployment benefit (not social benefit II or Hartz-IV), or through
the GKV family insurance if your own income does not exceed about 400 Euros. Basically, one day of compulsory insurance in the GKV is sufficient,
to effectively terminate the PKV. If one then immediately falls out of the GKV again, one will be immediately insured via the compulsory insurance for uninsured persons.
caught again, if one does not follow the request to prove a subsequent insurance (e.g. a private one). No one is forced to
to reactivate private health insurance that has been converted to a PKV waiting tariff after joining the GKV.

Only contribution-wise one is treated then however like a voluntarily insured one, so that also incomes from letting and from capital assets to
…is to be contributed. It does not matter at all whether a return to private health insurance would theoretically be possible or whether there would even be an obligation to do so.
The legislator does not (only) want everyone to have an insurance option, but that everyone is insured or that everyone who was once insured is insured,
can no longer get out of it if he does not provide evidence of an actually existing subsequent insurance.
If you are older than 55, you will regularly not be covered by compulsory GKV insurance in this way.


Easier access to GKV after a stay abroad

The following special regulations continue to apply for access to statutory health insurance after a longer stay abroad:
As a rule, no problems of access to the GKV arise if, upon return from abroad, employment subject to compulsory insurance in the
is absorbed domestically. This also applies to persons who have reached the age of 55 when they take up employment. Although remain
pursuant to § 6 para. 3 a SGB V persons who have reached the age of 55 and become liable for insurance after 30 June 2000,
are exempt from insurance (i.e. they are not members of the GKV, even though they are, apart from the age exception, exempt from insurance due to their compulsory
employment would constitute an element of compulsory insurance) if, in the last five years before becoming compulsorily insured, they have
were not covered by statutory health insurance at any time and they were insured for at least two and a half years during these five years in the
Federal Republic of Germany (!) were exempt from insurance, exempted from compulsory insurance or were self-employed as their main occupation.

This last requirement is met by persons returning after a longer (!, up to at least 2.5 years) stay abroad,
However, they do not fulfil this requirement, so that the aforementioned restriction on compulsory insurance does not apply to them. You have to be a resident before you can move to
Abroad in the inland in addition also not GKV-insured to have been, can thus PKV-insured have been, and gladly also independently active.
If one would have been insured in the GKV for one day before, one can save the move because of § 5 (1) No. 13 SGB V. The PKV usually ends conditionally
for moving out of the country, or they’ll cancel it. Employment after return to Germany must be subject to compulsory insurance contributions.
(which would not lead to compulsory insurance only because the age 55 would be exceeded without a stay abroad).the persons concerned do not have to
be impoverished. They may just find their PKV too expensive with the prospect of it becoming unaffordable after retirement, and the existing
Assets are eaten up. Residence in a suitable foreign country will often be accompanied by employment – at best with free board and lodging.


Design of PKV via supplementary tariffs

Depending on the agreement with the PKV insurer, it may be possible to switch advantageously to a private GKV supplementary tariff, for example by increasing the entry age to
is taken into account. At least it would be conceivable to keep only individual tariff modules of the private health insurance in addition by simply not terminating them in this respect.
In this context, it may be advisable to change the insurance cover in advance by means of a change of tariff pursuant to § 204 VVG in such a way that the tariffs are suitable for the insured person.
are broken down into the components that are subsequently continued without notice of termination, and the largest possible portion of the ageing provision is located there,
which is then no longer lost when the dispensable parts are cancelled.


Tariff change after § 204 VVG in the private health insurance often better alternative

As a rule, however, when all the advantages and disadvantages are weighed up, remaining in the private health insurance scheme in an emaciated but still advantageous position compared with the private health insurance scheme is likely to be the best option.
of a GKV offer tariff may be the better alternative. Without experts or lawyers, it is unlikely that you will be able to enforce the best solution.


Dr. Johannes Fiala, Dipl-Math. Peter A. Schramm

by courtesy of
Issue 47- Volume 9 – 04/2013

and (published in Die Tabakzeitung)

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About the author

Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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