Is German private health insurance (PKV) a trap in old age?

When you type “PKV vs GKV” in your search engine or your preferred AI tool, you will see multiple articles, discussions and AI responses on this topic with some claims showing up repeatedly: “PKV is cheaper when you are young and expensive when you get older”, “PKV is a trap at older ages”. Let’s analyse publicly available data and studies to understand whether those claims are true.

In case you want to understand the key differences between PKV and GKV including their pros and cons, you can check out the PKV and GKV overview on our website. Let’s jump right into what the data tells us about those claims. We took two people Peter and Arnold and calculated how much they would have paid in PKV vs GKV from 2005 to 2025. Peter and Arnold are model profiles built from a IGES dataset of ~93,000 employees and self-employed people (links to the studies at the end).

Person 1: In 2005, Peter was a 40-year-old employee and had 2 children, an 8-year-old and a 5-year-old.

Person 2: In 2005, Arnold was a 60-year-old employee and had 2 children, both of whom were over 23 years old and employed.

We assumed that Peter and Arnold joined PKV in their early thirties; the premiums shown are those actually paid by PKV members of Debeka.

For the period 2005 – 2025, Peter would have paid €60,932 in GKV with an average salary. If he had a salary at the BBG level (Beitragsbemessungsgrenze), his contributions in GKV would have been €85,003. GKV contributions are a percentage of your salary, capped at BBG. If someone earns at BBG level or higher, they pay the same GKV contribution. However, if Peter were insured in PKV, he would have paid €83,951 despite having to pay separately for his children’s health cover until 23 – children’s PKV cover until 18 and then the GKV student tariff until the kids are 23. The children would be insured for free in GKV under the GKV family insurance if Peter was insured in GKV.

The main takeaway is clear: If Peter were an average earner, he would have saved money being in GKV. Also, he won’t be eligible for PKV as an employee on an average salary. As an employee, you need to earn above JAEG (Jahrearbeitsentgeltgrenze) to qualify for PKV. On the other hand, if Peter were a high earner, he would have saved a small amount of money being in PKV. Without kids, his savings would have been higher.

You might have noticed that the GKV contribution graphs are smooth while the PKV one is jagged. The reason for the PKV graph being choppy is twofold: one, PKV providers must meet legal thresholds before they can adjust PKV premiums. So, the adjustments pile up and release at once, resulting in big changes in one go. Second, Peter only pays for his children’s insurance until they are 23. You see a drop when the children move to a cheaper student tariff at the age of 19. You see another drop when they reach the age of 23 and Peter no longer pays for them.

The situation is different for Arnold, who retires at 65 (those born up to 1946 could retire at 65). The employer contribution falls away when he retires. With an average salary over 2005 - 2025, Arnold would have paid €34,187 in GKV. If he earned at a BBG level, his contributions in GKV would have been €50,279. If he were insured in PKV, he would have paid €65,213. In this scenario, Arnold doesn’t need to pay for his children’s PKV cover since they were already over 23 years old in 2005 and employed.

What the data clearly shows: If Arnold were in GKV, either as an average earner or a high earner (BBG), he would have saved money by being in GKV.

PKV costs less for Peter but more for Arnold

A. Cumulative Contributions (2005 - 2025)

Name	GKV – Average Salary	GKV – BBG Salary	PKV
Peter (41 → 60 years old)	€60,932	€85,003	€83,951
Arnold (61 → 80 years old)	€34,187	€50,279	€65,213

B. What they paid themselves: annual percentage change (2005 - 2025)

Name	GKV – Average Salary	GKV – BBG Salary	PKV
Peter (41 → 60 years old)	3.4%	2.9%	2.4%
Arnold (61 → 80 years old)	-1.0%	-0.8%	6.1%

Source: Surenest analysis based on IGES dataset using assumptions described in the methodology

In all three categories (GKV – Average Salary, GKV – BBG Salary and PKV), Arnold pays less for his health insurance compared to what Peter pays. This is because Peter is working full-time during this period. Arnold works until 65 and then retires, with his pension being lower than his salary. This explains why Arnold’s GKV contributions are lower, since GKV contributions are a percentage of the salary. Interestingly, his PKV contributions are also lower. This happens because comprehensive PKV tariffs drop by 9.1% as one reaches the age of 61. This drop occurs across all PKV providers for all comprehensive tariffs (not supplementary) because PKV providers charge a mandatory 10% surcharge (GBZ: gesetzlicher Beitragszuschlag) to all their members from the ages of 21 to 60 to build reserves for old age. These reserves are then used to lower the premiums as one turns 65 and health care costs start to rise. Arnold’s old age reserves would have helped to keep his PKV premiums lower from the age of 65 to 80.

Is PKV cheaper for any of them? By being in PKV, Peter would have smaller annual premium increases and would have saved a small amount of money, if he were a high-income earner. On the other hand, Arnold spent ~€15,000 more being in PKV, assuming that he was a high-income earner. He would have experienced a 6.1% premium increase in PKV, compared to 0.8% drop in GKV.

Could Peter use his savings from younger years to pay for higher costs during the old age? As a high-income earner in PKV, Peter would have saved €1,052 over 2005 – 2025. If he had invested his monthly savings in a simple savings instrument earning him 3.5% annually, he would have grown his savings from €1,052 to €1,550. From the calculator on our website, we expect Peter to pay ~€19,000 euros more in PKV, compared to GKV as a high earner from the ages of 61 – 80 (years 2026 – 2045). To be on the safer side, he should plan with a 30% buffer on top. His small savings of €1,052 from his younger years won’t be enough to cover his potentially higher PKV costs during his older years. If Peter didn’t have children or if the children were covered for free in GKV family insurance through his partner, his savings in the younger years would have been a lot higher which might have been enough to cover his higher costs in old age.

Are the claims from the beginning of the article true?

- Claim 1: PKV is cheaper when you are young and expensive when you are older

The reality is that average PKV tariffs peak at the age of 60 and then drop by 9.1% as one turns 61. As mentioned earlier, this drop occurs across all PKV providers for all comprehensive tariffs (not supplementary) because the mandatory 10% surcharge (GBZ: gesetzlicher Beitragszuschlag), that builds old-age reserves, falls away. While PKV might be more expensive for someone in their fifties compared to someone in their twenties, we cannot always say – PKV is cheaper when you are young and expensive when you are older since PKV for a 70-year-old could be cheaper than PKV for a 50-year-old.

Being in PKV could make sense for two groups – expats and high-earners, especially high-earners without children. Expats can benefit from the lower PKV costs during their younger years, without having to worry about the higher costs during old age, if they plan to retire in their home country. High earners can save on their health insurance costs in their younger years and use those savings to offset higher costs during their older years. For high earners without children, not having to spend on kids’ PKV is an additional saving. However, if you want to see those savings, it is important to choose the right tariff among the thousands of PKV tariffs available in the market. Choosing a basic tariff could mean low costs especially at the beginning but it also means low coverage, which could result in significant out-of-pocket costs in later years. So, it is important to find a tariff which covers you reasonably well.

- Claim 2: PKV is a trap at older ages

When Arnold retired, his GKV contributions fell and adjusted to his pension level. His PKV contributions kept rising on their normal path, but his own share of PKV contributions jumped, because the employer’s share was replaced by a smaller pension subsidy. The so-called trap exists in this asymmetry, not in a premium explosion. What feels like a trap for many people is that they can’t switch back to GKV after the age of 55. So, a decision made at 35 cannot be reversed at 65. But a switch to a cheaper tariff within PKV is always possible.

However, there are cases, where PKV can become a trap in older years. Imagine that both Peter and Arnold were married to stay-at-home partners. If both Peter and Arnold were insured in PKV, their partners would also need their separate PKV contract. The PKV costs would roughly double for both of them, compared to what we calculated above. However, the GKV costs would remain the same since stay-at-home partners are insured for free under the GKV free family insurance. Also, we considered an average PKV tariff for our analysis. Being in a premium PKV tariff would mean even higher costs over one’s lifetime. A single working parent with a stay-at-home partner is one of six profiles for whom a switch to PKV needs careful thought - alongside people with pre-existing conditions, those planning a long career break and anyone expecting a modest retirement income.

Conclusion

With the two example scenarios, we analysed the claims that are commonly found in media and found out what the data tells us. We also highlighted scenarios, where those commonly cited claims might be true.

As you can already tell from this article, many factors are at play when it comes to deciding how much you pay for health insurance in PKV vs GKV.

• Income: Higher the income, more your GKV contribution (up to BBG). PKV contributions depend on tariff, age and existing health conditions. Income doesn’t play a role.
• Age: Age plays an important role in determining your PKV premium.
• Employment type: As an employee, the employer pays half of your contribution. If you are self-employed, you need to pay the entire contribution yourself.
• Existing health conditions: In PKV, you pay a risk surcharge or might be denied coverage, if you have an existing health condition. GKV doesn’t have this limitation.
• Family status (married/ single / children): A non-working partner and children (max up to 25) are covered for free in GKV family insurance if both parents or the higher earning parent are insured in GKV. If the parents are divorced, at least one parent needs to be insured in GKV for the children to qualify for free family insurance.
• Tariffs: The tariffs in GKV and the services are legally defined. So, GKV tariffs don’t vary significantly across providers. On the other hand, PKV tariffs number in the thousands with coverage ranging from basic to premium.

Whether you are better off being in PKV or GKV, depends on your individual circumstances.