Health Insurance

It is compulsory to have German statutory health cover when residing in Germany.
The international health insurance you mentioned does NOT fulfil this requirement - and could only be an addition (e.g. for people who frequently travel outside the EU, where the German one does not apply).
If you have to opt for the private scheme due to your age, this will be expensive (FAR more per person per month than the amount you mentioned!) - but actual cost depends on your individual circumstances, like pre-existing health conditions, and the plan you choose. Get a quote from a few providers or consult an independent insurance agent before you decide!
But first of all, you should check (and get the answer in writing) that you really cannot join the public scheme - they offer a subsidized rate of approx €80/month for students (university) and dependents without own income are covered free of charge.
(P.S.: It is impossible to tell how insurance premiums will develop in future, but most experts expect the price of private cover to increase steeply, and the public scheme more moderately due to subsidies and younger, healthier members.)

Thanks for your reply. The term German statutory health cover which you used, gesetzliche Krankenkasse, refers to public health insurance rather than private health insurance (Private Krankenversicherung). I did receive another quote of 477 Euros monthly for my wife from a private German insurer which I considered rather expensive and not really what we need. I already contacted two German public insurance providers who confirmed that we are ineligible to join and think it unlikely any others would accept us due to our age and previous use of private travel health insurance. But I understand private travel health insurance is no longer considered valid after 5 years of residence in Germany. As far as future price increases, we may have to eventually factor these into our decision to stay in Germany in the long term or return to China.
Mainly I need to know whether health cover for hospitalization or day care treatment, together with cancer, mental health hospitalization, as well as another policy against 30 dread diseases, is sufficient to convince German foreign office that my wife has health insurance? For the outpatient care (including normal visits to the doctor) , I would rather pay out-of-pocket than pay for an additional 100 Euros per month, same with dental care. In any case, I think the hospitalization insurance is really what my wife needs currently and will have to see what happens. Because my impression is that Germany only imposes financial penalties when uninsured persons accumulate health care bills which they are unable to pay.
Finally, if the international company  with a website offering health insurance cover, advertises on this expat website, in which Germany can be inputted as the country of residence, and is not in conformity to German legal requirements, then could it be considered the fault of the insurer rather than the insured?

My term "statutory German health cover" was meant to include the German public and private health insurance system. You have to join one of the two.
If the foreign or travel insurances have maximum limits to coverage (you wrote "1 million dollars annual coverage" above), options to pay certain items out-of-pocket or exclude certain diseases: These will sure not qualify per German regulations!
It is also not a matter of convincing the German authorites: It would have to be the insurer who is certified as German health insurer (ask them!) - if they are not, there is nothing you can do.
€477/month for a woman above 55 is cheaper than I expected - you will not find anything less than that. (The minimum for a young and healthy person is about €350/month in both the private and public scheme - unless you qualify for a subsidized rate.)

Travel health insurance is not the same thing and cannot cover one for 5 years in Germany. The whole purpose of such insurance is for tourists temporarily being somewhere. And like Beppi mentioned, private insurance that meets German standards is not cheap at such an age. This is exactly the downside of private insurance here; while it might have some perks and even be cheaper in some situations for a young person, it gets progressively more expensive.

I want to add: Your post implies that you are already in Germany and do not currently have health insurance cover that fulfills the requirements. In that case: Tread VERY carefully and hope nobody notices: They can (and certainly will, if they find out) backcharge you for the entire time you were in Germany without (and there is no way to get out of it). Multiply €477 by the number of months you have been in Germany and you see why I warn you!
Here is a list of all certified German private health insurers:
https://www.krankenkassen.de/private-kr … pkv-liste/
Take one of them (each offers various plans) and stop thinking about any other option that will not work. To figure out which of the available options is the best for you, consult an independent insurance agent.

Thanks again for your suggestions! I especially appreciated Beppi's suggestion to request a written confirmation of the refusal of health insurance. In fact it turns out, that as my wife just turned 55, it is possible after all to postdate the beginning of the public health insurance until just prior at the beginning of this year and only post-pay several months. Because my wife's income this year is currently just below the statutory minimum value, we will pay about 202 Euros monthly for the entire family of 3 instead of about 1140 Euros under private insurance.  It is also unusual for her to be able to directly register as self-employed with a registered firm without first proving an employment contract.

Of course the payment rate increases with income, but I think it is definitely worthwhile for any expat families in which the combined income is less than about 4400 Euros (2200 for individuals) monthly to attempt to obtain public health insurance, especially if one has children. If one waits until one is over 55, it will then be too late to obtain public health insurance if one comes from outside the EU. Ability to obtain affordable public health insurance would also affect the feasibility of long-term stay in Germany.

As far as travel health insurance, I was not aware of the statutory limitation of 5 years that is nonrenewable, I thought it was simply a term that can be renewable for another 5 years. It is commonly used by university students who normally travel back and forth to their home countries. As a university student, one can study in Germany for up to 10 years. So there is a gap for an older student obtaining affordable health insurance in the last  5 years, if one or one's spouse does not have employment.

Congratulations, this is the best solution in every aspect!
The German public health insurance is a system based on mutual solidarity - everyone pay what he/she can (as a fixed percentage of income) and everyone gets the coverage he/she needs, regardless of what he/she pays in. So it is only fair that, after getting below-cost insurance now, you pay in more later when you earn more.
The problem with travel health insurances is not that they are limited, but that they are not at all recognised as sufficient health cover here (for any residence visa). I don't know how you got away with it for so long, but it was certainly incorrect!

Good you got this settled. And it just highlights the incredible advantages of having a public option in some situations; like having family that can be insured for free! A young single person who earns a lot might find it cheaper to have private insurance - but eventually they get older and later might have a non-working spouse and kids. And then they are stuck with increasingly expensive insurance coverage.

Here is hopefully a footnote on this matter.

My wife submitted an application for KKH public health insurance which I would recommend for anyone who is self-employed with a registered firm in Germany, again up to 4,400 Euros family monthly income or 2,200 Euros for a single person. For higher incomes, private German accredited health insurance may end up being cheaper and more flexible in certain circumstances because they are based on a fixed-cost monthly premium rather than a percentage of income. Because it is difficult to change between private and public health insurance,  one has to bear in mind what one might expect to earn over one's career or future family situation (i.e. single or married, with children or not) rather than one's current income level or family situation.

When I was contacted by the private health insurer (advertising on this Expat website) regarding partial coverage for hospitalization only, it turns out they have annual increases of 2 to 8 % annually. Because of our age, we have to assume the higher figure. Under the rule of 72, 8% annual price increases amount to a doubling of price in 9 years and quadrupling in 18 years. The German government health insurance seems to have more limited annual increases. So in the end, after 18 years, one ends up with limited health cover for the same price with catastrophic future increases in one's waning years, precisely when health insurance is most important. So one needs to be very careful in considering the long-term consequences of one's health care provider decisions!

Good points Oetg. A high-earning, young, single person might be tempted to get private insurance but eventually it gets more expensive and a non-working spouse and/or kids are not covered for free like under public options. I always recommend one getting public options and in addition one can get supplemental coverage privately if they desire.

Thanks for the comments on this post.

Regarding annual cost increases for health insurance, whether private or public, and whether German-accredited private insurance or non-accredited private insurance for someone temporarily in Germany.

I think that even 2% annual increases are even too high, since they could mean 20-year-old wage earners would have to pay double rates by the time they are 56 and quadruple rates by the time they are 92 years old.

If you are in the position to shop-around or lobby for reduced annual increases for health insurance, you should insist on not more than 1.4 % contractually-guaranteed annual increases. Then a 20 year-old wage earner might expect to delay the doubling of the monthly payment until 70 years old, and hopefully it would be only about three times by the time of decease if the person lives to 90 or 100 (which is not uncommon these days). A 1.2% increase would be better, however, in order to guarantee no more than a doubling of health insurance by age 80, and a 1% increase would guarantee no doubling of premium by age 92. In order to prevent a doubling of the monthly premium by age 100, the annual increase would have to be capped at about 0.9%

Actually, with bank rates currently about 0%, there is really no reason even to pay more than 0.9 to 1.4% annual increases in health care premiums. The problems of health care rises, can be solved by technological efficiencies rather than by burdening health care workers with  accepting low salaries, and have to be managed by the private insurers in cooperation with governments, rather than by health care consumers. Also, eventually better governments will eventually have to phase out private insurers, replacing them with various public health insurance providers who could then compete with each other to provide the best services and benefits for their clients, and also have incentives help keep them healthy rather than having to incur health costs in the first place. A model for this already exists in the accredited public insurance providers in Germany which I think amount to 10 or so.

I guess this means that shopping for health care providers ends up becoming a lesson in economics. Wishing everyone the best with finding the best option that works for you!

Oetg: No German health insurer will guarantee you any future price increases, as the rates are all automatically set by either regulations (for the public scheme) or general cost development (private scheme). If you assume 2% annual inflation, any price increase below that is clearly unrealistic. I heard that some experts expect increases of 4% annually in the public and 7-10% in the private scheme (forgot the source, but you can probably google it).

Thanks for your message, Beppi!

Of course one is talking about historical increases which might have some impact on future increases. This would tell you how well the government or private health insurers have been managed, and whether they have introduced unrepresentative price increases in the past.

One could not necessarily talk about a future "guarantee" in an absolute sense, mainly in a target or anticipated future increases. But whether one is talking about a target or guaranteed future increases, it makes no difference, because we are talking about insurance and this is a risk which is something the insurer rather than the consumer would have to worry about. After all, the essence of insurance is future risk-management.

If you are not concerned about annual health care insurance increases, you should be, because a rate of 2% annual increases means the price will double in 36 years and quadruple in 72 years. And all younger professionals have to reckon with the fact they will eventually live to around 90 or 100 years of age.

Also don't be fooled by the catch-all phrase "annual consumer price increases" of 2% or so. This reflects increases in the overall economy rather than the every-day consumer. For only extremely wealthy persons is this a meaningful indicator.  For example, housing prices and rental costs can easily rise 10% annually whereas food prices or many consumer goods might remain relatively stable prices. If you are planning to relocate in 5 years, you might have to accept a 60-70% or higher rental increase! This also gets into the question or purchasing one's apartment and settling in the place one currently lives at rather than renting indefinitely, which could also have devastating economic consequences.

Best regards!

Inflation is determined by surveying the price of a basket of everyday goods, thus by definition affects everyone (not just the rich).
At 2% inflation (which is the EU's target), a 2% increase in health care (or insurance for it, which is directly correlated) means the relative cost did not change. In fact, experts expect health care to increase faster than general prices.
But, anyway, there is nothing you can do about it in Germany, as insurance fees are set by others, not you.

Like Beppi mentioned, private insurance companies are not going to guarantee such limited rate increases whether you rationalize them or not. They have their rates and you take them  - or not.

Public options fluctuate the exact percent but the calculations are regulated. But it is all based on a percentage of income. They have no control over your income, so they cannot say how much you will actually pay. But the percentage a worker pays is a little over 15% and it has fluctuated around this for years; it does not steadily increase. The extra cost of Covid vaccines and testing costs is likely to cause an increase in the coming year or 2 but it could well sink again afterwards.

In fact I managed to discuss the historical rates of increase with the representative an accredited private German health care insurer, whom I assume would be on the list Beppi sent me. I believe this is one of the more creditable private health insurers in Germany, because a medical house in the city near I leave also uses its name.

He told me that generally speaking the historic price increase is about 1% annually. A person who is no longer a student, already working about 20 years-old can expect to pay monthly premiums of 250 Euros. He agreed that the doubling of price would occur after about 70 years, i.e. at age 90 (age 92 if one followed the rule of 72). This occurs by periodic rate increases, generally 5 or 10 years at 5% or 10% respectively. However, if the person is in poor health, a 5% increase after 4 or even 3 years is possible.

Effectively this is not an assurance, but a good hope that the price would not increase more than 1% annually, which is not far away from the 0.9% increase that I think consumers should really be demanding.

To speak of price of goods as a basket of things is rather misleading. Often persons have to pay as much as 40% or 50% of their monthly income for rent. With a 2% annual income, this means persons on a fixed income, after 36 years they have no money left after paying the rent because the rent alone becomes 80 to 100% of income with only a 2% increase. It means that people have to leave their homes they have lived in for decades. If you haven't noticed, this is already happening right now in Berlin. Wealthy persons generally own their residences, that is why they are wealthy, whereas unfortunately renters will always have to struggle to pay their bills and could end up spending their retirement years in poverty. It is never too early to think about one's retirement, and the first decision to make would be to purchase an apartment. It is still possible to purchase apartments at reasonable prices through compulsory auctions (Zwangsversteigerung), for which one needs to have saved 10% of the stated value in a bank cheque plus a guaranteed bank loan.

Therefore, I would say that to accept annual private health increases of 4% would be simply disastrous. It means that monthly premiums would double within 18 years and quadruple within 36 years. So a working person in their 30s would not want to have to pay 4 times as much when they are 70 years old, this is only a recipe for disaster. It would only get worse after than, one has to pay 8 times as much for insurance when one reaches 88 years of age.

All of these calculations can be made simply by applying the "rule of 72" which is divide the percentage into 72 and you get the years the cost will double. For example, 2 % increase means doubling in 36 years, 3% doubling in 24 years, 4% doubling in 18 years, and 8% doubling in only 9 years. And once it doubles, it will double again in the same numbers of years. Thus 2% increase means a quadrupling of prices in 72 years and so forth.

To end up this discussion: look for the private health insurer that only charges 0.9 or 1 % annual increases! This may also be less expensive than the public insurance option, because if one enters into private health insurance at a relatively young age, one can avoid unnecessary catastrophic price increases such as offered by British or American insurers who change exorbitant rates! If one manages to purchase a German private health insurance policy, it may also be portable when one returns to one's home country and is also a more affordable long-term option which is not defendant one one's employment. As it is not based on a percentage of income, it is guaranteed at a fixed amount. The main disadvantage of private health insurance is that it does not include care for the non-working spouse or children. If we were younger and both still working, we might have preferred to take German private health insurance if we had known about it.

It would be interesting to know whether a regular German private insurance could be portable to the the United States. For all other countries one would not have to pay higher premiums, but if one moves to the USA I assume that there would also be a doubling of premium due to the higher medical costs in the USA. However, if the annual price increases are only 1% compared to 4% or more for an American health insurer, it would definitely be worthwhile to choose to retain the German health policy even it initially costs somewhat more, but in the longer term could save a lot of money and avoid catastrophic increase that could occur with increases as small as 1.5 or 2%. These figures seem to be small, but actually are not, because a 1.5% increase represents a doubling of price in 48 years and 2% increase represents a doubling of price in only 36 yers.

Anyway, this all goes to show that decisions such as purchasing a home instead of renting or the type of health insurance one chooses are actually long-term decisions which can have profound implications which must be weighted carefully in light of one's retirement years. Best regards.

You seem to be living in a parallel universe, where inflation works differently than here (In my world it is an exponential function and cannot be approximated by a linear "rule of 72", which is just mathematically wrong!), where health care costs increase at a lower rate than other prices (Here, health care costs increased - according to official statistics - by 4.5% in 2015, 4.7% in 2017, 4% in 2018, 3.5% in 2019 and for 2020 a higher rate is expected due to the pandemic. Clearly health insurance premiums must increase at a similar rate.) and where insurance agents can be believed.
I also disagree to your assessment of buying property by foreclosure auctions (Zwangsversteigerung). I did that myself many years ago (and now live in that house): While in some cases the price might be low, you really have to know what you are doing (because you buy a property you have never seen from inside!) and expect high renovation costs. This is NOT for everyone - and buying a property is anyway not a good option for young people who want to remain mobile. (Plus, unlike you claim, the foregone profit from investing the money is often higher than the rent, making real estate purchases also financially unsound.)
Goodluck with yoour worldview, but please allow others not to share it!

Thanks for the recent comments of Beppi.

I would have to remark that increases in health care costs in the last few years alone, are not the same thing as increases in health insurance premiums. I assume that health insurers look at the long-term and also at long-term customer relationship as well as potential new relationships. They are not necessarily concerned in momentary fluctuation because of a world health crisis which may last 2 or 3 years. These are all my own assumptions, I am not an insider in German private health care insurance, and future facts could well prove me wrong.

This German health insurer provider did in fact tell me that there would be a 10% increase after 10 years, 5% after 5 years, or possibly after 4 or 3 years. In other words, an increase of no more than 1.7% is virtually guaranteed. The latter is possible especially if one has encountered health issues and increased health costs, but I am not sure whether it could be ongoing increases every 3 or 4 years or one-off only.

I have no idea which health insurer provider Beppi has, whether German or foreign. Also, if she wishes to change the private German health insurance provider, the premium may not be exactly the same, it might be slightly higher to find the right provider who would be willing to help her get down to the annual increase range she wishes. But in the end it may be worthwhile it if she believes the health insurance provider will cap its future rates. If she is unwilling to shop around, then she will never know. The premium of another German health insurance provider may actually be the same, but have lower annual increases, so it ends up being much less expensive after only a few years. The way I found this one was through an on-line internet insurance comparison portal through the German yellow pages site.

As far as buying a home under compulsory auction, of course it would not be for everyone, because of the renovation costs likely involved. But still a compulsory auction home can cost around 50% or less than the market price for the same home, and generally the renovations could be phased in according to the economic conditions of the buyer. I generally would recommend a compulsory auction if one is planning to stay in the same location at least 3 years, because then one saves the rental costs. Of course how long one might stay in one location is always tricky to determine. If one does relocate to another city after only a few years, one can then rent out the home and obtain income. So there is no great downside to buying a compulsory auction home, and generally it is very worthwhile considering instead of renting. One has to make a monthly payment anyway, so why not make it to your own home rather than to someone else? But please don't hold me responsible if you end up losing the home or if it doesn't work out for you! Best regards,

As I wrote before: Since when is the talk of insurance agents at all believable?
Fact is that the cost of German public health insurances are set by lawmakers (who also cover the shortfall the insurers face, so you get some subsidy here) and in the private scheme solely by the development of actual health care cost (with no subsidies possible) - this also set by regulations and with very little freedom for insurers. Customer retention and other aspects do NOT feature in this, at all!
Foreclosure auctions in Germany are never 50% below market value. (Otherwise it would be inattractive to the debtor who pursues it!) If you are very lucky, you might save 20 - 30%, but in fact most auctions end above the valuation price (especially in the current property bubble).
Also, with the high fixed cost of property purchases (10 - 15% of the buying price goes to fees and taxes!) and the taxation of re-sale proceeds, it is unadvisable to re-sell without holding the property for more than 10 years (not 3, as you claim!). And renting out when one lives elsewhere is unattractive, due to the high cost of a(then necessary) caretaker ("Hausverwaltung").
Please stop spreading myths and half-truths here.
By the way: I am male, not "she".

Come to think of it: How would you, an unemployed foreigner who is struggling with the cost of health care (according to your earlier posts), buy a flat here? I assume you would be hard-pressed to collect the necessary cash (30% of the buying price is generally recommended) and most banks would not give you a loan.
So is this just idle talk?

These are all good points that Beppi makes. Market value of property is of course relative to the time one sells. I actually should have said that the compulsory prices one pays is about half the expected market value one could expect to sell it for after 10 years. A 70-80% appreciation of home value over the next 10 years is simply an estimate.  In the 2008 financial crisis, insurers wrongly assumed that home prices would increase, and they did not.  A single American insurance company managed to bring down the worst economic crisis in 75 years. And this could well happen again. As far as whether this particular German insurance agent was telling the truth, I will be glad to update you regarding the 5% increase, whether it actually occurs every 3 years, or even every two years. If it were to happen within 2 years, that would be a 2.5% increase which is closer to the range Beppi is talking about. These were all verbal statements and nothing was actually in writing. As far as finding renters after one moves, there could be troubles in finding renters, and finding an administrator would involve paying a hefty percentage of the income. So everything Beppi is saying could well  be true, and I have nothing to argue with him (sorry about confusing the gender). It all depends on what might happen in the future, which is always uncertain.

This whole discussion is a bit strange because you are trying to rationalize price increases in insurance rates in connection with inflation; as if that were the primary or only factor. WRONG! Does  inflation affect rates; yes but the primary factor is age and the probability of resulting health costs. It's like looking at a term life insurance policy and claiming the premiums should not increase more than inflation but they are based on the actuary tables of probable death. And yes, there is a high correlation of health care cost increases as one gets older. Even with inanimate objects, scarcity of specific resources can greatly outweigh overall inflation in determining their price.

And one could have a conversation with an insurance person about relatives costs but this is not the same as having a valid negotiation about prices. Private insurance rates will depend on age and medical conditions. How significant various health conditions might be is a debatable factor that could affect rates but  claims that premium increases should be lower since they outstrip inflation is a non-issue for them.

As far as what Tom is saying, again this German insurance agent is trying to say that rates do not tend to increase due to age, but he may be contradicting himself when he also says that a 5% increase can occur after 3 years due to health condition. And of course as one ages, one's health generally deteriorates and that is why the question of whether it is one-off or not, or even happens within 2 years, become more critical. He seems also to say that there are no major periodic increases every 5 years, in other words the increase is limited to 5 % every 5 years. If he cannot answer this question, he cannot answer it. But still I think this is still better than accepting a much lower premium which may have an 8% annual increases, and doesn't seem to be accredited in Germany. This goes to whom one trusts and what one is comfortable with. Although the German insurance agent quoted about 527 Euros monthly, I would probably have to accept the offer if public insurance were not available, and I wanted to stay in Germany rather than returning to Asia. Basically I am semi-retired and try to live on a limited income, but enjoy studying as a student.

oetg wrote:

Thanks for the recent comments of Beppi.


As far as buying a home under compulsory auction, of course it would not be for everyone, because of the renovation costs likely involved. But still a compulsory auction home can cost around 50% or less than the market price for the same home, and generally the renovations could be phased in according to the economic conditions of the buyer. I generally would recommend a compulsory auction if one is planning to stay in the same location at least 3 years, because then one saves the rental costs. Of course how long one might stay in one location is always tricky to determine. If one does relocate to another city after only a few years, one can then rent out the home and obtain income. So there is no great downside to buying a compulsory auction home, and generally it is very worthwhile considering instead of renting. One has to make a monthly payment anyway, so why not make it to your own home rather than to someone else? But please don't hold me responsible if you end up losing the home or if it doesn't work out for you! Best regards,

Forced auctioning of property in Germany is called a Schwangsversteigerung. This used to be a great way to get a property well below the market value - 20 years ago or more.  Whether a property would need extensive renovation is of course possible but is in no way correlated to such sales. There were many property companies that would get a property for say 50% of the market value and turn around and resell it at 80% or so. Theoretically they could have held out for more but the point was to have a quick turn over. The same capital could buy and sell up to a dozen properties in a year - better than selling 1 or 2 for a higher return.

Individual buyers were rather rare because they really need to know the market well to properly appraise the values and had to have the money available for immediate payment after the auction, no time to go shopping for a mortgage. When such companies leveraged their assets they tended to take shorter term, higher interest loans. The conditions were worth the extra cost since they were not looking for long term ownership but to flip the properties quickly. What happened though was that so many people got into the game that they drove up the general prices for the limited amount of forced sale properties.

Another type of investor (I personally have known both types) were people looking to buy rental properties and  hold many of them for at least 5 to 10 years. For them, getting properties at 75% to 90% of market value was OK. Many of them actually looked for properties that needed renovating which means more investment and time needed but also a profitable strategy. The guy I know that went for the rental properties told me in recent years that the competition at the auctions has gone up so much that it is hard to find a significant discount from market price anymore. The upshot is that while such auctions can still be a possibility, the likelihood of find a great property for a huge discount is mostly history.

I did some research about the private health insurance cost in Germany, when I faced the choice a few years ago (and in the end opted for the public scheme). The system is extremely complex and regulated, but my (simplified) understanding is this:
- Each tariff offered by an insurer is in fact a community based on mutual solidarity, meaning the collected fees from all members (minus administrative costs and some profit, which the insurer deducts) must cover the health care cost of all members.
- If the actually accrued health care costs of the group increase, the fee increases for all members (this must be approved by the relevant authorities after checking the validity of the costs, which is normally a formality).
- This means, if the age and/or health situation of your fellow group members deteriorate, fees will go up. But you have no way of checking who the others are (data privacy) and only some insurers tell you how many others are in your group.
- In theory, ageing and deterioration can be countered by continuously admitting new, younger members. But the insurers have no incentive for this, and prefer to market newer, sexier and cheaper (because no old ballast cases) tariffs to new customers. That is their decision and there is nothing you can do about it. (They also make it deliberately difficult to change tariff within one insurer, presumably for that reason!)
- The insurers must also (by regulation) set aside some money to counter future fee increases due to ageing, but these are insufficient (and you lose some or all of it f you change insurer or tariff).
- All this is the reason private insurance costs MUST increase by more than the overall German health care costs (which is around 4% per years, as in my previous post). Anyone who tells you otherwise is naive, or a liar.

The public health insurance scheme is also a community based on mutual solidarity, but not compartmentalized into smaller group: All publicly insured form one big group. Thus the fees will increase at the same rate as the overall health care cost - and possibly even less, because public insurers (unlike private ones) receive subsidies.

TominStuttgart wrote:

The guy I know that went for the rental properties told me in recent years that the competition at the auctions has gone up so much that it is hard to find a significant discount from market price anymore. The upshot is that while such auctions can still be a possibility, the likelihood of find a great property for a huge discount is mostly history.

This is EXACTLY my assessment - and I do follow real estate market trends closely (at least in my area).
If you are o.k. with getting some junk property at slightly below market value (and can pay for it without loan) - and then spend a year or two (at great cost) to renovate it - then foreclosure auctions are an option. Otherwise not.
And in the currently overheated market, for many buyers price is less a concern than getting something to buy at all. Therefore most auctions currently end far above the valuation.

This is all probably very true. As far as public or private health insurance, this is  private decision. I am not really convinced that public health insurance is the best for everyone and I am seriously considering private health insurance for my children because it seems to have low annual increases, but maybe I can tie the insurance agent up into knots when I point out some of the contradictions in what he is saying. This also may end up getting a better deal in the end.

As to whether the 4% annual increase is true or not, this would also depend on how well the German company is able to extend its market or not. There will definitely be losers among the German private insurers and consolidations. If one is thinking of the German population as a closed system, what Beppi says may be true. However, If German insurers are willing to extend internationally including the USA, there are significant opportunities as well as risks, which is what insurance is all about.

We bought the compulsory auction 5 years ago and probably conditions have significantly changed. A private individual has to have a pre-approved mortgage and also a rather tidy sum saved up in order to undertake this endeavor. If one is willing to live further out or accept a rather small apartment, there may however be some good possibilities out there and also very good deals. For the larger and more central properties there may not be any significant benefits of compulsory home purchase, and the downside of renovation costs which could easily run up to the level of a market purchase. One also has to have a good sense of which parts of the area one lives in are already mature and which are undervalued. Everything also involves a measure of risk one has to take, it is only a matter of evaluating whether a certain risk is worth it or not.

There may well be a housing bubble and who knows what will be happen. However, this is a lump-sum statement and it also depends on where one is investing at one time. If one invests in a larger or more central property one is taking a considerable risk. So if one is considering whether to purchase rather than rent, one should also think seriously of buying something  that is really a good deal and maybe less desirable in terms of size or location, but which later has really great potential for appreciation.

oetg wrote:

This is all probably very true. As far as public or private health insurance, this is  private decision. I am not really convinced that public health insurance is the best for everyone and I am seriously considering private health insurance for my children because it seems to have low annual increases, but maybe I can tie the insurance agent up into knots when I point out some of the contradictions in what he is saying. This also may end up getting a better deal in the end.

Again, not how things work. One can talk to an insurance agent and discuss how things work. Pointing out contradictions or supposed reasons to negotiate lower rate is not possible - although there could be clarification of the extent of certain medical conditions which could affect the rate. You seem to be ignoring BeppI's explanation how pricing for private insurance is determined.

oetg wrote:

We bought the compulsory auction 5 years ago and probably conditions have significantly changed. A private individual has to have a pre-approved mortgage and also a rather tidy sum saved up in order to undertake this endeavor. If one is willing to live further out or accept a rather small apartment, there may however be some good possibilities out there and also very good deals. For the larger and more central properties there may not be any significant benefits of compulsory home purchase, and the downside of renovation costs which could easily run up to the level of a market purchase. One also has to have a good sense of which parts of the area one lives in are already mature and which are undervalued. Everything also involves a measure of risk one has to take, it is only a matter of evaluating whether a certain risk is worth it or not.

I did not claim that foreclosure auctions don't happen anymore or that the prices would not be lower than market value. But the days of real significant discounts is mostly over unless one gets extremely lucky. And one can have banking arrangements that they have a good line of credit so that they could finance buying property but there is no such thing, to the best of my knowledge, as a "pre-arranged mortgage" in Germany. Mortgages tend to have lower rates than other kinds of loans because they are backed by the property as collateral. This involves a process that cannot be done beforehand. The loans property speculators are using are generally shorter term and not considered mortgages.

The discussion about how it is possible for private health insurances to charge only 1% annual increases is an interesting one. Beppi has stated that since health costs increase 4% per annum, it is impossible for health insurers not to charge less than 4% per annum.

This argument assumes that there is an average lump-sum population in which everyone has 4% annual health care increases. However, I would hypothesize (and perhaps sociological studies would confirm this), that there are actually two main categories in the population. The percentages and relative annual health care increases are purely conjectural, and would have to be confirmed empirically, but they might explain the situation.

1. The first category, around 75 % of the population, includes generally persons who rent homes, smoke, have limited disposable incomes, poor diets, work in blue-collar and high risk jobs, tend to live only until their 60s, and have average annual health care increases of 6-10% per annum.
2. The second category, around 25% of the population, includes generally more educated persons, tend to own their homes, have larger disposable incomes, good diets, work in white collar jobs, and tend to live until their 80s, and have average annual health care increases of around 1-2% per annum.

Now it is easy to see from this description, which persons would tend to the public health insurance and who would tend to take private health insurance. Those who elect private health-insurance, in effect, are self-selecting , they are willing to undertake initially somewhat higher premiums because they are more educated and have greater disposable incomes and they know that eventually they will pay less in health care costs and perhaps obtain better care and services. Of course there would also be some educated persons who also take public health insurance, but not really enough to effect the entire pool, because educated persons in this case are a minority of the public health insurance pool. This is not intended to offend anyone, but it is simply a hypothesis of why private insurers know why they can sustain low annual price increases, simply because they know they don't have to ensure the general population, but only their self-selected clients. Best regards,

The parallel universe again ...
Did you actually read (and understand) my posting above about how private health insurance premiums are set - with each tariff actually being a lump-sum population in itself, by regulation, and there is nothing you can do about it (at least in this universe)?

Here is an interesting article about private health insurance increases over the last years. Actually, there was a 5.3% increase last year due to the pandemic following previous increases of 2.6% and 1.7%. Roughly that averages more to 3.2% than 4%. If one excluded last year, the two year increases averaged about 2.2% annually. Then if one were to go further back, the rate increases may have actually been less than 1.7% historically.

https://www.thelocal.de/20210421/cost-o … -pandemic/

The article states that about 11.2% of the German population uses private insurance. They tend to be more educated. But it doesn't really get into the issue of whether there are two different groups who have different rates of costs increases, etc. There seem to be about 30 different private insurers in Germany, so different insurers have different rates and different policies. So I don't know.

Trust is a basic element of any relationship. One trusts one's lawyer, one trusts one private insurer, and so forth. Of course if there is more evidence that a private insurance company cannot sustain a 1% annual increase on its clients, I will welcome seeing it. Best regards

Even if the overall premiums of all privately insured persons increase by X %, yours are very likely to increase by more - because, as I described above, you are locked into one ageing tariff group while the insurer attracts younger new members to a new and cheaper tariff (as yours is no longer attractive).
But I think this discussion is turning in circles and is besides the point: Price increases or not, private health insurance is far more expensive than public cover once you have family or no income (e.g. due to unemployment or retirement). THAT is the main risk and cost factor!
(And I would never trust a lawyer.)

oetg wrote:

https://www.thelocal.de/20210421/cost-of-private-health-insurance-in-germany-spikes-in-the-pandemic/

The article states that about 11.2% of the German population uses private insurance. They tend to be more educated. But it doesn't really get into the issue of whether there are two different groups who have different rates of costs increases, etc.

Don't assume that better educated people being the more likely to be privately insured has to do with them making more intelligent choices due to better education. The thing is that public insurance is basically the default option. There are strict rules like minimum income levels to even be allowed to take private over public options. Private insurance is rarely long term advantageous; generally it seems cheaper for one who is young and single but doesn't fit when one has a non-working spouse and/or kids - and gets older as we all do. If anything, private insurance is suited to be marketed to short sighted people who have money to burn.

I think I can explain why a private German insurer can sustain a 1 % annual increase.

Basically, the pool of insured is never stagnant, there must be at least 2% of the pool each year who drop off due to death or cancellation. Also, there must be a conservative growth of additional 3% per year of annual profit growth, or altogether 5% growth replacement of the pool per annum, 50% in 10 years and 100% in 20 years. After 20 years, the older clients no longer have a significant influence on the overall portfolio.

Now the new clients probably pay a historically 2% increase, or even as much as the price increases for that year. That means, the same new policy this years costs about 2% more than that of last year. These increases are calculated and based on monthly health care increases and also phased in on a monthly basis, so there is no question of suddenly increasing 5% rates for anybody. The new client doesn't care that his entry premium has raised 5% from that of a client the previous year, he only cares what he pays from the policy start. The differences between year and year also eventually become smoothed out and become insignificant. So as long the historic price increase over the last 20 years remains about 2% per annum, there is no problem capping the raise in the rates at about 1%. In fact, an average heath cost price increase of 3% is quite sustainable for several years, because 1% increase is gained from old clients and 2% increase from new clients.. Anyway, the insurers probably obtain about 10% profits on proceeds per year, so a fluctuation between say 9 or 11% on their profits over a couple of years would not be considered significant.

This interpretation seems to confirmed in that the rates offered to my wife and me are about equivalent to 1.7% higher per annum increases than those offered for my children who are around 20 years of age. In contrast to Beppi's interpretation, I would assume that the historic increase of health care costs over the last 20 years amounts to 2%, and only a few years of his statistics would not be relevant. Best regards

You seem to not read or understand our messages - this is not how things work in Germany. (And you are pretty bad at maths, too!)
If you ever manage to run a German private health insurer along the lines you describe (and are successful with it), please come back here and report it. Thanks!

I want to remind you that you came here clueless (and with delusional ideas) about your own health insurance situation. Through my advice, you managed to get a better and cheaper solution than you thought possible. This was because I understand how the system works, and you don't.
Now you again ramble about topics you don't understand and propagate delusional ideas. We, who understand these topics better, point out to you again and again that you are wrong, but you don't stop rambling on - without even reading (or understanding) our reasonings.
This is getting on my nerves - and I will thus ask the moderators to close this topic, as everything that needs to be said is already there.

Thanks for your comments. This question has really stressed me out. And the point about paying for the insurance in retirement is well taken. How does it work in either private or public health insurance plans? When one "retires" so to speak at age 68, doesn't one still continue to pay premiums until decease, whether under private or public plans?

I am talking about 3 or 4 individual plans. To speak of my children or a family is no longer really relevant since they are already 19 and 16 and already or virtually adults anyway. So I have to think about what my children need also as adults. It seems that the private German insurer is willing to cover my children valid internationally both in Germany and the USA. This is very important to me because my children could have guaranteed premium starting under 250 Euros monthly with a guaranteed increase of 1 % per annum It would be fully detachable and  mobile and any employer could pay into it whatever amount desired, or maintained as self-employed (thus avoiding the impossible problem of trying to obtain a group rate.)  Sorry, no German public  medical plan works in the USA! And I cannot imagine any American insurer would make this kind of offer either. If you are on a German public plan, and you wish to relocate to the USA,  unless you take up employment with a fairly well-healed German or American corporation, you will have to face unbearably higher rates and well as high annual increases!

What anyone believes about private health insurance in Germany is one's own opinion, but when one is talking about a plan valid in both the USA and Germany at a reasonable price, this is really an entirely different question altogether.

My counter offer is going to be that we all enter together as a combined family  unit or group rate of four persons, with an average age of 37. The offer I am making will help the company avoid any problems with seamlessness with the previous private travel health insurances I had with them as well as any problems or question arising with the transition to the public health plan. Anyway, I will see how it works out.

In order to refine the "math" of how private health insurance quotations work.

--As far as I can tell, the " aging" factor amounts to 1.7% per annum  (as I have already mentioned). In other words, the same policy this year costs about 1.7% more as it was last year, which generally most entrants would not really pay much attention to.
--A 5% health cost increase year is an aberration which is not very significant over 20 years, Divided by 20, it becomes only a 0.25%  annual surplus to the " aging "  factor or marginal 0.02% monthly which no one would notice anyway. As it was clearly an aberration one the last 3 years, it was not even factored into any of the quotations of myself and wife.
--That insurers operate on a rolling 20-year basis is a quite reasonable assumption given a 2% drop-off due to deaths  and an additional expected 3% in growth of new policies. In other words, insurers either continue to survive or they are swallowed up by their competitors.
--As the German market for private insurance is reasonably saturated, the least risk for German private insurers to expand internationally is through German expatriates who are studying overseas, probably the Netherlands and the USA, and formerly Britain prior to the EU-breakup. But actually any foreigner who has residency in Germany at the time of application could be considered a German expatriate, which is our point of entry.
--Health insurance management amounts to 1% of total health care costs, which is basically charged to each policy annually. If managed well, one creates space for profits and aberrational years and so forth. The 10% figure I used was merely a figure of speach.
--Health care cost increases of 2% per annum over the last 20 years has never been disproven to me by Beppi or any else. If so, I agree it would cause "distrust". The space of addition 0.30 % over the "aging" factor also creates something for private insurers to use for profit or competetive advantages etc.

Also, so-called health-incapacity insurance, which amounts to "retirement" is available in private as well as public health insurance.

Bear in mind that public health insurance could never be portable to the USA. On the other hand, with private health insurance, at least for German expatriate students or perhaps others up to age 30, one could define Germany as one's home and include countries internationally such as the USA, which involved a doubling of premium in the case of the USA, but which is rationalized by the fact a students pays only around 120 monthly anyway.  We are talking about a policy for a working young adult between aged around 22 to 30 who could normally pay less than 250 Euros at begin.

So by proposing a group rate on the four of us, I hope to convince this particular German insurer that our average age is only 37 years, which is only a 7 year variation or aging factor over the maximum student age, etc. This just happens to be the starting cost value of public health insurance.

I don't see the point about quibbling about real estate terminology, since I am a lay person in this field. I a talking about a real-estate sector of about 50 to 150, 0000 Euros about 5 years ago which included apartments and some remoter older landed properties in this area. This year it would obviously be 70-80% higher or so. I am therefore not surprised that a relatively recent house, especially probably over 300,000 Euros around the year 2016, would currently only be discounted about 20-30%. That is also what I would call more mature properties (including some centrally located apartments). But of course ex-pats would not be interested in making such commitments on a relatively short term.

So this is the "universe" I have been trying to explain as a layperson in all this terminology. Does my "universe" make sense somewhere else?

When you retire, you have to of course continue paying the health insurance premiums. In the public scheme, this is a percentage of your income (incl. pension), so it will reduce. In the public plan, premiums stay the same.
German private health insurers cover you during short visits (usually six weeks per year) to USA, but no longer when you move there. Thus your consideration for your kids is wrong. You cannot keep a German statutory health insurance when you move abroad.
And, again, there is NO 1% INCREASE RULE. I can assure you that it will be at least 4% (the rate at which the overall price of health care increased per year over the last 20 years) or more. Anything else is wishful thinking!