Have your private health insurance premiums been adjusted? Here’s what you need to know

Many private health insurance companies in Germany already announced at the beginning of 2022 that they would adjust their premiums. But how are monthly premiums calculated in the first place, what does it mean if they are adjusted - and what special rights does this give you as the insured party? Private health insurer ottonova explains what you need to know. 

What are health insurance premiums?

While your monthly contribution to statutory health insurance in Germany is worked out as a percentage of your salary, private health insurance works a little differently. Private health insurance premiums are calculated according to several factors, including your age, coverage and medical history, but not your income.

While statutory health insurance only covers basic treatments, meaning you might also have to cover other costs in addition to your monthly premium, including co-pays or coinsurance, private health insurance offers extensive coverage.

ottonova is able to keep its health insurance premiums stable, and offers special rates for expats

Your premiums for private health insurance in Germany can change

Since the health insurance premium is worked out as a kind of risk calculation, your risk as an insured person is likely to increase over time, as you age and become more likely to need medical care. As you get older, your premiums will rise. 

One way that private health insurers try to offset this trend is by building so-called “ageing reserves” or old-age provisions (Altersrückstellungen) with your monthly premium. These reserves are put aside to accrue interest over time, which can be used to help bring down premiums in later life, counteracting the rising cost of health insurance. 

It’s worth noting that expats are not obliged to put aside ageing reserves for up to five years after arriving in Germany. This is why ottonova can charge a special expat tariff at a cheaper rate. 

Why are my monthly premiums for private health insurance being adjusted?

While the ageing reserve helps to offset the rising cost of healthcare as we age, treatment costs themselves are also constantly rising. Every now and then, therefore, private health insurance companies are forced to increase their monthly premiums. 

As soon as the actual costs of treatment exceed the calculated costs by 10 percent, an insurance company will enact a premium increase. In practice, this 10-percent threshold is often not exceeded for many years, keeping premiums stable. As soon as the threshold is breached, however, the insurance company is legally obligated to adjust its premiums. 

The premium adjustment takes into account not only cost changes in the current year, but also changes in previous years as well. Sometimes this can result in an abrupt premium increase. The longer it’s been since the last premium adjustment, the more drastic the increase is likely to be. 

By calculating accurate interest rates, ottonova can keep premiums stable

Another factor that can influence private health insurance premiums is the interest rate on the capital market. Many insurance companies don’t calculate their premiums in line with the market interest rate. As a result, their premiums will increase significantly over the years due to the unrealised return. ottonova always calculates interest rates in line with the market, enabling them to not only offer low premiums at the start, but also ensure that their premiums remain stable. 

If your insurance premiums are adjusted, you have a special right to termination

At the beginning of 2022, many private health insurance companies in Germany announced that they would adjust their premiums. Axa, Allianz, Gothaer, R+V, uniVersa, Signal Iduna, Hanse Merkur, Debeka, LVM, Generali, Continentale, Hallesche and Concordia, among others, are raising their premiums by an average of 4,1 percent, but some of them are even increasing them by as much as 12 percent. 

If a private health insurance company increases its premiums, members have the special right to cancel their policy, regardless of the minimum contract term or notice period. All you need to do is make sure the company receives notice of your termination at least one day before the price increase comes into effect.

When switching providers, it’s essential to take ageing provisions into account. For contracts concluded after 2009, ageing provisions can normally be (partially) transferred when switching insurance companies. For contracts concluded before 2009, however, ageing provisions will be lost, meaning that you might face higher premiums. 

ottonova: Private health insurance with stable premiums

ottonova is Germany’s first fully digital insurance provider and does not make premium adjustments at the beginning of the year. But why do premiums remain stable at ottonova?

As already mentioned, the right interest rate plays an important role here. A large number of insurers calculate with an interest rate of more than 2,5 percent, because of outdated structures.. Since this rate is not in line with the market, it causes premiums to rise due to unrealised returns. In contrast, ottonova calculates with an interest rate of 1,25 percent, in line with the market, which leads to stable premiums.

In addition to stable premiums, you will benefit from many advantages and digital services at ottonova, including: 

• English-speaking concierge service with real-time support: Get immediate answers to all your questions about your insurance coverage and health.
• No paperwork: ottonova is 100 percent digital – from signing up to submitting bills. Have all your health documents neatly organised in the ottonova app.
• Lightning-fast reimbursement of your invoices: Within 48 hours (Monday to Friday for invoices up to 500 euros).
• You matter wherever you are: Including international assistance and international insurance coverage while you travel.
• Video calls with English-speaking doctors: No more wasting time in waiting rooms.
• Goodie for you: Get a 30-euro Amazon voucher after signing up.

Sounds good to you? Then go ahead and arrange a non-binding consultation with one of ottonova’s English-speaking insurance experts. They’ll be more than happy to answer any questions you might have.