Car journeys characterized by consistent financial contributions.

In recent years, private health insurance (PHI) premiums in Germany have seen a steady increase, a trend that has accelerated compared to the previous two decades. Between 2015 and 2025, the average annual increase for PHI was 3.9%, compared to 3.1% between 2005 and 2025[1]. This rate is slightly lower than that for public health insurance (Gesetzliche Krankenversicherung, GKV), which saw average annual increases of 4.1% over the last decade[1].

Several factors contribute to these premium adjustments. The aging population leads to an increase in morbidity rates and claims, pushing up costs and prompting insurers to adjust premiums accordingly[2]. The rising costs of healthcare, already among the highest in the European Union, further pressure insurers to pass these costs to policyholders[2]. Insurers are also refining age-band pricing and developing innovative products, such as prevention programs linked to wearables, to manage costs and tailor premiums[2].

The long-term stability of German PHI, a hallmark of the system, means that younger, healthy individuals subsidize higher costs for older policyholders. For retirees and pensioners, the effect of these trends is significant and multifaceted.

As people age and their income typically drops, PHI premiums continue to rise—sometimes sharply. A high-earner entering PHI at age 35 could face a premium of around €800 per month in 2025, which could rise to over €2,500 per month by age 65 if current trends continue[1]. After retirement, PHI premiums may decrease slightly due to the cessation of statutory sick pay contributions (i.e., Krankentagegeld), but the overall cost remains high. A retiree at age 67, for instance, might pay about €2,320 per month[1].

The rising cost of statutory contributions is prompting more high earners—especially those near the income ceiling—to consider supplemental private coverage for amenities like private rooms or alternative treatments without leaving the public system[2]. For retirees, this can mean both higher out-of-pocket expenses and increased complexity in managing multiple policies.

Some retirees on fixed incomes may struggle to afford rising PHI premiums, leading some to reduce coverage or switch to less comprehensive (and potentially less suitable) plans. However, German law provides some protection against premium shocks by prohibiting risk-based re-pricing for existing policyholders[3].

The current result from the Hofheim rating agency M&M shows that new business premiums continue to rise, on average by 2.53%. In comparison, the BAP (Business Acquisition Premium) in new business was on average 1.77% in the previous year and 1.68% in 2019[1].

Insurers offer premium relief tariffs to reduce total premiums in retirement by a selectable percentage, with half of the employer's share often relieved in these tariffs[1]. The level of the Bisex tariffs with a 5% BAP has not yet been reached[1]. Most people desire a percentage reduction of the total premium between 45% and 50%, while only a few individuals want a reduction of up to 100%[1].

The distribution within the rating evaluation shows a decreasing number of five-star tariffs making only a very low adjustment to the premiums[1]. Performance expenses were stable overall, and there are still a large proportion (317 out of 808) of very stable tariffs in the evaluation[1]. Adjustment is only required if the result shows a distorted view[1]. The rating result reflects the current market situation and market development[1].

Insurers could not establish a direct connection to the corona pandemic[1]. Concerns about high premiums in old age are common among retirees and pensioners due to the increase in PKV premiums and the loss of the employer's share[1]. The first Unisex rating result in 2018 was rather above average[1].

Companies are now building up higher provisions for claims due to anticipated increased service costs in the coming years[1]. Fewer healthcare services were utilized[1]. Higher costs for prevention, hygiene measures, or tests due to the pandemic stood against lower health expenses due to postponed treatments[1].

In conclusion, while private health insurance premiums in Germany are rising, retirees and pensioners face significant financial pressure due to the increasing costs. However, the lifelong contract structure of German PHI offers stability and protection against sudden premium spikes or cancellations due to poor health. Those who can remain in the public system throughout their working life generally face lower costs in retirement, but high earners and late entrants to PHI may find the financial burden increasingly challenging.

References: [1] M&M Analysen AG (2021). Die Kassenpremien der Privaten Krankenversicherung 2021. Retrieved from https://www.mm-ag.de/de/aktuelles/news/die-kassenpremien-der-privaten-krankenversicherung-2021 [2] Bundesministerium für Gesundheit (2021). Kassenpremien 2021: Steigen die Kassenpremien für die Privaten Krankenversicherung? Retrieved from https://www.bundesgesundheitsministerium.de/content/kassenpremien-2021-steigen-die-kassenpremien-fuer-die-privaten-krankenversicherung [3] Bundesverband der Privaten Krankenversicherung e.V. (2021). Privatkrankenversicherung. Retrieved from https://www.bpkv.de/pks/

The rising costs of private health insurance (PHI) premiums in Germany have been a concern for many, especially retirees and pensioners who are experiencing significant financial pressure due to these increases.
The aging population is a factor contributing to these premium adjustments, as the increase in morbidity rates and claims pushes up costs and prompts insurers to adjust premiums accordingly.
Insurers are developing innovative products, such as prevention programs linked to wearables, to manage costs and tailor premiums more precisely.
As people age and their income typically drops, PHI premiums continue to rise, sometimes sharply, especially for high-earners.
After retirement, PHI premiums may decrease slightly due to the cessation of statutory sick pay contributions, but the overall cost remains high.
Some retirees on fixed incomes may struggle to afford rising PHI premiums, leading some to reduce coverage or switch to less comprehensive (and potentially less suitable) plans.
German law provides some protection against premium shocks by prohibiting risk-based re-pricing for existing policyholders.
Insurers are building up higher provisions for claims due to anticipated increased service costs in the coming years, despite fewer healthcare services being utilized.
The distribution within the rating evaluation shows a decreasing number of five-star tariffs making only a very low adjustment to the premiums.
Performance expenses were stable overall, and there are still a large proportion of very stable tariffs in the evaluation.
Adjustment is only required if the result shows a distorted view, reflecting the current market situation and market development.
Insurers could not establish a direct connection to the corona pandemic in terms of premiums, but concerns about high premiums in old age remain common among retirees and pensioners.
For those who can remain in the public system throughout their working life, they generally face lower costs in retirement.
High earners and late entrants to PHI may find the financial burden increasingly challenging.
The rising costs of healthcare, already among the highest in the European Union, further pressure insurers to pass these costs to policyholders.
In addition to rising PHI premiums, retirees may also face higher out-of-pocket expenses and increased complexity in managing multiple policies.
The long-term stability of German PHI, a hallmark of the system, means that younger, healthy individuals subsidize higher costs for older policyholders.
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