Private Health Insurance Cost in Germany

What determines your PKV premium?

Unlike public insurance (where premiums are income-based), private health insurance premiums are calculated individually:

• Entry age — the younger you are at entry, the lower the premium
• Health status — pre-existing conditions may result in surcharges or exclusions
• Coverage level — deductible, dental, hospital class, sick pay
• Tariff structure — basic vs. premium coverage

The employer subsidy — the hidden advantage

By law, German employers must pay 50% of the PKV premium (up to the maximum GKV employer share).

For most young professionals, this means the employer covers a substantial portion — often making PKV significantly cheaper than GKV.

Read more about the employer subsidy →

Comparison: PKV vs. GKV costs for high earners

Costs you can reduce

• Deductible (employees) — we recommend €0 deductible for employees, because your employer pays 50% of the premium but the deductible comes 100% from your net income
• Deductible (self-employed) — without an employer subsidy, a deductible of €300–€1,500 can reduce premiums meaningfully
• Premium refunds — claim-free years result in cashback (up to several months)
• Tax prepayment — prepaying 2.5 years of premiums creates significant tax savings

Long-term cost development

PKV premiums can increase over time due to medical inflation and aging.

However, several mechanisms stabilize costs:

• Aging reserves — capital accumulated to absorb future increases
• Statutory surplus sharing — insurers must share investment returns
• Tariff switching rights — you can switch to lower tariffs within ARAG