Deductible in private health insurance: how it works and when it pays off

The deductible is an annual amount agreed by contract up to which you pay reimbursable bills yourself. Only above it does the insurer reimburse at the level agreed in the plan. It is part of the plan and is set when you take out the contract, per person and per contract. It has nothing to do with patient charges and gaps in plan reimbursement that can also arise in a claim. It is a chosen, predictable amount, not a hidden gap.

Two forms are common:

• fixed annual amount: an amount in euros agreed in advance, up to which you pay bills yourself
• percentage model: for example ten, 15 or 25 percent of each bill, up to a fixed annual amount

Depending on the plan, the deductible can apply to different areas of benefits, for example only to outpatient or only to inpatient care, while dental treatment can be excluded from it. An example of the percentage version (ten percent deductible, maximum €500 per year):

• bill amount: €1,900
• out-of-pocket share of ten percent: €190
• reimbursement under the plan: €1,710

Whether a deductible pays off is decided by a simple comparison. The annual premium savings must permanently be higher than the benefits you pay yourself on average. A worked example:

• plan premium: about €600 per month
• chosen deductible: €600 per year
• premium reduction: around eight percent
• savings: about €576 per year

If you hardly submit any bills in most years, you win. If you regularly use treatment above the limit, you pay twice: the full out-of-pocket share and only a small premium saving. These premiums are guide values.

The deductible follows levels that are common on the market. The values are experience values and differ considerably between insurers and plan series. The law caps the amount: under § 193 (3) VVG, the deductible may not be more than €5,000 per year.

Civil servants with a plan that supplements their Beihilfe (i)BeihilfeThe state healthcare allowance for civil servants. The Beihilfestelle pays a fixed share of medical costs, the Beihilfesatz, and private insurance covers the rest.More about Beihilfe → usually do not choose a deductible, because their plans are mostly designed without one. As retirement comes closer, the savings shrink and the need for treatment rises, so high levels then usually no longer make sense. Important for families: the deductible applies per contract. If several family members have private insurance, the out-of-pocket shares add up.

For employees, the deductible has a hidden side effect that appears in almost no sales calculation. The employer pays half of the actual premium, capped at €508.59 per month in 2026 and expected to be capped at €557.81 in 2027. If the premium is below this cap, the employer contribution falls with every premium saving, so the net effect is cut in half. The deductible in a year with claims, on the other hand, you pay alone.

We recommend that employees explicitly calculate the difference between premium savings and the reduced employer contribution before any increase of the deductible. In many cases, only half of the nominal savings is left net. This reduction does not apply to the self-employed. They keep the full premium savings. This is exactly why a high deductible is mainly a tool for the self-employed.

When you take out the contract, you can choose any level offered. In an existing contract, the way up is easy: an increase reduces the insurer's obligation to pay and therefore usually works without health questions. The way back is the trap. A reduction counts as additional benefits, so the insurer may check your state of health again and charge surcharges. If you choose the high level in healthy years and want to lower it when your health declines, you often fail exactly when the low deductible would be most valuable.

The billing itself is unremarkable. You submit bills, the insurer adds them up over the year and reimburses everything above the agreed limit. There is hardly any time pressure, because you can submit bills up to three years retroactively.

In our advice work we see a recurring pattern. The deductible is chosen as a quick lever on the premium, without checking your own reserve and your treatment profile. We recommend that you pull out three years of claims history before any decision and compare it with the calculated premium savings. That is the only reliable calculation.

One more note on tax, without claiming to be tax advice. Insurance premiums are deductible as provision expenses, but bills you pay yourself within the deductible are not. A high deductible therefore shifts costs from the tax-deductible to the non-deductible area.

This differs from plan to plan. Many plans apply the deductible only to outpatient and dental treatment, others to all areas. You do not have to pay anything up front in hospital. The insurer settles the bill directly with the hospital and collects any deductible that is due from you afterwards.

Yes, often even twice. If you stay below the deductible, you get nothing reimbursed anyway. If you submit nothing at all, in many plans you also secure the no-claims refund for claim-free years. Both effects belong in the same annual calculation.

Yes, the insurer can change the agreed deductible level. In practice, however, this almost never happens.