Health Insurance

oetg wrote:

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?

Not only the terminology is one of a lay person but the (mis)understanding of many fundamentals of both insurance and realty is glaring. As they say, a little bit of knowledge can be a dangerous thing - when combined with wishful thinking and lots of misguided rationalization.

I really don't feel like going into the details of a disability income but to compare it to a retirement is misleading. And the idea that one can "declare" Germany as their residence and actually live elsewhere and be insured through German based insurance is out of the question. Some German insurance companies are indeed in the US market but sell policies there at different rates and conditions than here. So no, even a private German health insurance will not be usable in the US unless specifically stating so; and in this case they will undoubtedly charge a US comparable rate. In Germany, there are no such "group rates" and the idea of calling a family one and using the average age as a basis to negotiate a rate is nonsensical.

Thanks for further comments from Beppi. I have made some special pleading to obtain private insurance with unlimited time coverage including the USA. It is very unusual for a student to obtain this kind of rate when 58 years old, but how else does one obtain affordable health insurance?  I don't mind paying my share of private German accredited health insurance indefinitely if it only costs around 250 Euros and include indefinite US cover with low 1% annual increase. I am not sure what the private German insurer will reply, but anyway I already have submitted the public health insurance application which might also be approved any time now. My children clearly already can get cover for indefinite period coverage in the USA, so I am hoping that by applying by group rate with average age of 37 my application receives special consideration.

As far as the relation between health cost increases to private health insurance, I have already offered what I consider a plausible explanation. I doubt actually that health insurance costs have increased more than 2% per annum if one excludes the few aberrational years. Also, I think that generally private health insurers, and probably especially this one, enjoy covering a much healthier clientele, so that the lumpsum health care increases are not really relevant to their situation. And the 2% annual increases I presume is covered by the age surcharge factor of 1.7% per annum of new entrants of about 5% of the overall client portfolio each year.  The 1% cost of annual increases is actually through efficient management. It is a major factor of driving down health costs overall if the insurance management portion of health care costs amount to only 1% rather than 2-4%! This company also clearly has a competitive advantage over other German private insurers and may eventually swallow up the others. It has its own building in the city centre for health care specialist providers to whom it therefore also enjoys a special relationship. I wouldn't be surprised if it is already the largest private health care insurer in Germany.

Beppi also mentioned a range of annual increases among private insurers between 2 & 7%. But 7% would be rather exceptional, it would range between 2 to 4% actually. That a private health insurer enjoys a privileged clientele only requiring about 1.7% to 2% per annum age surcharge is not an unreasonable assumption. Also the calculation of 1.7% is made after a significant number of years, i.e. around 28 years for someone like me aged 58. If it were only one or two years it may be more like 2%  per annum for age surcharge factor for new entrants.

Anyway, I don't actually know how the figures work, I am simply making some suppositions and hypotheses however to explain the facts plausibly. Best regards.

Regarding Tom's comments, all our family members have lived here at our registered home for 6 years, with three renewed residence periods of 2 years, and my daughter already has accepted status as a German student applicant for indefinite period USA cover, my son will presumably also easily qualify, so I am hoping the group-rate argument has some plausibility for USA cover for my wife and myself. Further, I am also a student, although quite exceptional, since normally the student rate only applies up to 30. The 100% surcharge for USA cover is already rationalized by the fact that the student rate is only 120 per annum which is about half the rate for employed persons. I hope not to have to pay a 120 Euro surcharge for USA cover on a policy under 250 Euros but would have to see whether the average age argument of 37 will be plausible. After all, if they don't accept my argument, they end up losing 4 good paying clients, and they need to make their own enrollment quotas. My letters have already been submitted, and I hope to hear the result within one or two days.

In order for someone else's application as a German student for private health cover to be plausible, the persons would probably normally have to be under 30 years of age at time of entry to be considered. I would say 28 years of age would likely be the maximum age entry limit, for it would take about 2 years to figure out one's status in Germany, acquire the German language, and the need for permanent health insurance as well as the advantage of permanent USA cover for the student rate. But the age limit could actually be lower. Also, I don't know whether retraining accreditation programs for persons previously educated in other countries would actually qualify one to be called a student, or actual enrollment in a university would be necessary. As for residence, likely it would have to be a minimum of 12 months, which requires a locked sum of 10,000 Euros in a German bank account. This amount is approximately the same as to place a deposit for a cumpulsory auction or acquire a mortgage or loan to purchase a type of property I have mentioned already, normally a non-luxury apartment or perhaps even a remoter landed property, both requiring renovation and costing around 90-250,000 Euros at current prices with prices maybe increasing 10% per annum.  Possibly simply a rental contract would satisfy the residence criterion, but certainly owning a property might increase its plausibility.

Once again I appreciate Beppi's opinion and I hope that my application for a public health insurer goes through.

My situation is that I don't mind paying for private insurance if I think its initial costs are reasonable and increases of only 1% sustainable. I take the decision and also the consequences. But I believe this private company, with the circa 1.7% increase per annum for new policy holders plus the 1% annual increase on the existing holders, which amounts to a cap of 2.7% of increases on health care costs because I think they have an exceptionally healthier pool of clients whose health care costs do not reflect the general population. Their management practices are actually incentivizing the control and driving down of health care costs, which would not be the case with public insurance. But actually I think they are dealing with a extremely health pool of clients which only has 1.7% cost increases per annum, because then they maintain their profit margin of 1%. If someone comes in who immediately has high medical costs, they impose an 1.7% increase over 3 years or 1.25% over 4 years, in other words the cap is lifted slightly to about 3.4% which basically approximates the 4% figure Beppi is talking about. Another way of looking at it is, the health cost increases are mainly absorbed by their annual new cohort of clients whom I assume is at least 5% of their total clientele. Within 20 years the less healthy clients will have deceased and no longer present health care costs. Risk is managed by the growth in the size of the company and the constant influx of generally healthy clients each year.

Also, the argument that the costs must increase 4% because that is the overall increase of health care costs, does not take into the account the variety of providers and their clientele, which I believe have significantly differentiated health care costs. I believe that public providers probably have cost increases in excess of 4% and their shortages are subsidized by the government, that is why they are called public insurers in the first place.

Of course, if all insurers must have costs increases of 4% per annum, and insurance agents are not to believed, etc. then again by the rule of 72 there will be a doubling of costs within 18 years and quadrupling within 36, so that one ends up paying the top rate of public insurance anyway of about 900 Euros per month or more. This argument however, seems to be an oversimplification of the situation, and does not adequately differentiate between public and private health insurer practices and clientele. It ends up being somewhat circular, such as, private insurance is as expensive or more expensive as public insurance, persons taking up private insurance are short-sighted and will lose out in the end and get what they deserve, private insurers are not to be trusted, might as well have public insurance anyway, etc. This is a kind of polarization mentality where there is no room to respect different opinions.

As far as the family members argument, this benefit is only for a limited period of time, namely until the family members are around 18 years old, when they have to take up some form of insurance anyway. In my case, my daughter is already 19 and able to qualify as a German student who is studying overseas (in this case the USA), and also live indefinitely in the USA with this plan. The price under 250 Euros is certainly reasonable and comparable to to the university plan offer, which expires within 5 years. Taking up another American plan later would be prohibitive in its initial starting cost, maybe at least 3 or 4 times as much, and also certainly have annual increase probably of 4% or higher if she is a private individual. So I see only positive aspects of taking the student plan for her and no significant downsides.

Because there is also a good chance we also wish to follow our daughter to the USA, then a private insurance plan is better for me if it provides that option at no higher cost than the public plan. The risk of getting 4% increases instead of 1% is not really significant, if I think the initial starting cost is low and no American insurer will give me less than 4% anyway. If its cost because too expensive, I could drop it when I become eligible for Medicare in the USA at age 65. But I have a premonition that the costs of taking up supplemental health benefits in the USA might end up increasing and costing the same or more anyway, and I plan to continue to travel back and forth to Germany and the Netherlands for my research anyway, and may prefer to keep an affordable and portable German private plan indefiinitely.

Also, I don't feel limited in the sense that taking up employment anywhere would therefore jeopardize my health insurance status or whether I choose to Iive in the USA, or how long I could visit my daughter each time I go to the USA. One of the reasons I came to Germany in the first place was I thought US health insurance was too costly and not worth it for a non-employed or semi-retired person.  Others reasons include, free university education, low cost public transportation with a student card, freedom from criminality, and lesser social and racial disparities. If I am employed, I have to have my own plan anyway . I am able to afford to pay for an affordable plan indefinitely when I think it is not going to have significant increases. Thereafter, I am prepared to accept the private plan if I think it within the price range I expected, but if not, not and remain with the public plan. However, I certainly respect other persons' personal opinions and choices. Best regards,

The private German insurer replied is not able to give me the student rate under 250 Euros including USA cover. Also my wife received her public health insurance cared, and probably the rest of family members with receive cards shortly.

I wonder however, If the public health insurers ultimately rejected my application, would the private German insurance then be obligated to make a new offer or not?  Because if I go to the local German foreign affairs office for visa renewal in are months, and name the private insurer, then it become embarrassing for the German private insurer, whom I would name to the German foreign affairs office, to explain a 7-fold increase of the regular private health insurance over the private travel health insurance cover. The legal situation in my case is also a bid muddy because maybe there are not many older foreign students with this kind of situation. This might also take a while to straighten out. Unfortunately for them, just because I happen to be a US citizen, this might put me in a privileged situation, but maybe not. Also, I might be reduced to  a renewable 1 year visa only or perhaps less. To have to go to the Foreign Affairs office every 3 months is a bit troublesome.

If the public insurer had or would have rejected me, which I think extremely unlikely, I would wait another year until my current private travel health cover (which would then continue as it is for another year) expires in August 2022. I also will have to see whether a 120 Euro surcharge on the private health insurance cover of 527 months for unlimited US coverage is possible. It would have to be a cost to consider if I wish to relocate to the USA after my daughter goes there. Still, I think it would be cheaper than a US policy I would expect to cost at least 750 to 1000 dollars with more limited coverage and also higher annual increases. Maybe the surcharge could be added at any time, and still be a good deal, at least until I become eligible under Medicare cover in only about 6 years time. It would more or less be the same cost as a travel health insurance policy for about 5 years, but it would have the advantage of no one-year gap in between and unlimited cover in comparison to travel health insurance. More likely, however, I and my wife will wish to go back to Asia and simply make periodic visits to Germany and the USA.

I also think the German private health cover for my daughter is a very good deal, and am very inclined to take it, and I must decided prior to 1 July. For my son I think will also recommend him to take the private German coverage within a year, because I think he can then chose whether to live in Germany or not, or study in the USA and perhaps return to Germany. A

My figure of 1.7 age annual increase for new clients was based on a starting point around 20 years of age by the rule of 72 from something like 200 Euros. So if 30 years is actually the starting age from around 250 Euros at age 30 to 527 Euros at age 58, the annual increase or age differential for new clients is more like 1.9%. This would mean roughly, private health insurers pay around 2.9% annual health care cost increases for their clients if one includes the 1% cost increase for existing clients, and that generally public insurers pay only slightly more than 4% cost increases, such as 4.4 or 4.5% due to their management practices. This means a differential of about 1.5%  or so between private and public health care cost increases. This may be enough to convince many persons that the continuance of private insurance providers provide better cost control to the overall system. Due to the political situation in Germany, I rather doubt the abolishment of private health care likely.

Hello everyone,

@ oetg: Thank you for starting this discussion on insurance. Since our members have managed to adequately answer your questions to the best of their ability, we consider that you have gathered enough information and thus it is best to close this thread to avoid this discussion running its course in an off-topic manner.

Thanks,

Diksha
Team Expat.com