If your gross salary over each of the past three years has been more than 48,000 euros, you have the option of taking out private health insurance (Private Krankenversicherung or PKV) instead of joining the government health plan. Self-employed persons, German civil servants, those persons working part-time and earning less than 400 euros per month, and everyone else who is not a member of the public health insurance system are all required to purchase private health insurance within the first month of taking up residence. Failure to do so will lead to penalty back charges, so there is no sense in delaying the issue. And don't think that you can use travel health insurance for your stay in Germany ... it is invalid once you become a resident.

The private medical insurance market is served by about 50 German insurance companies, and there are premium/benefit combinations available to suit every budget. The per person cost of full medical insurance is based on the benefits chosen, as well as on age, gender and any pre-existing conditions. Private health insurance companies must also offer so-called "basic" (Basis) coverage - which basically offers the same scope of service as the public health insurance system with a capped cost.

Generally speaking, private health care premiums for individuals over 40 years old are more expensive than the state system. You can, however, reduce the monthly cost of your private insurance by agreeing to a higher deductible. Also be aware that you must pay separate premiums for all members of your family, unlike the government insurance system in which all non-working dependents are covered. Premiums tend to increase over time due to medical inflation, while your entry age determines the initial premium level. Starting in 2010 you can also offset a certain amount of your premium from your income taxes.

Private health plans cover a wider choice of medical and dental treatment in Germany and abroad. With private health insurance, you are considered a private patient and can expect more and faster services from the medical profession. Hospitals and doctors depend to a certain extent on private patients to supplement their income and tend to welcome them. A private patient can also request and will often get doctors who speak their native language. Privately insured patients also have access to brand medicines and more high-tech diagnostics.

German private health insurance companies are not allowed to cancel your policy if you submit claims, and are also required to put 10 percent of your premiums aside as a provision towards keeping the cost stable at retirement. Similarly, private insurers are not allowed to cancel your contract - even if you fail to pay your premiums for a significant time - and must uphold emergency coverage during this period. For this reason, private insurers are becoming more selective about whom they insure and many of them demand that you are resident for at least 24 months in Germany before they will accept an application.

If you purchase a private medical insurance plan from a German health insurance company that provides a certificate recognized by the German government (Arbeitgeberbescheinigung), this will allow you to take advantage of the same employer subsidies as a government health insurance member. This means that your employer will pay half the premiums of your private health care insurance or the maximum amount they would pay for a GKV-insured employee. If such certification is not provided, your employer has the option, but is under no obligation, to compensate you for part of the cost of your medical insurance.

Also note that even if you keep you insurance policy from your home country, you must still pay into the government's long-term nursing care program (Pflegeversicherung) and may also wish to purchase supplementary sick pay insurance.

Private health insurance from International providers

In the past, it was quite popular for expats to use international health insurance policies offered by insurers outside of Germany but within the EU - mostly based in the UK and targeted to the specific needs of expats. However, the latest German health insurance reform in 2009 requires international insurance companies to also comply with the German insurance code and as of mid-2009 most of these policies will have failed to clear this legal hurdle.

This issue has become even more complicated, because some of the German regulations may be in violation of EU law. The issue revolves around whether Germany will recognize European directives for cross-border selling of health insurance for non-Germans seeking a residence permit. Important Note: If you are unsure about whether or not your existing international health insurance currently complies with German law, write to your insurer and ask for a clarification. Another alternative is to contact an independent broker who can supply you with unbiased advice.

(Foto: AOK-Mediendienst)