Statutory surcharge in private health insurance: the ten percent loading and its effect

The statutory surcharge has applied since the year 2000. Since then, private health insurers must charge a premium surcharge of 10 percent on the main plans of comprehensive health insurance. The legal basis is § 149 VAG. The aim is to cushion rising premiums in old age.

The surcharge applies to comprehensive health insurance. It is not charged in the Notlagentarif. One distinction matters: the statutory surcharge in private health insurance has nothing to do with the Zusatzbeitrag (i)ZusatzbeitragThe additional contribution each statutory health insurance fund charges on top of the general rate. Its level differs from fund to fund.More about Zusatzbeitrag → of the statutory health insurance funds. The two follow different systems.

The surcharge is added to the plan premium. A sample calculation with guide values:

• Plan premium: €600
• Statutory surcharge (10 percent): €60
• Gross premium: €660

The extra amount goes into the individual ageing reserve with your own insurer, not into a general pot. Conversely, this means that a very cheap plan saves premium at first glance but may build up less reserve for old age. So the surcharge does not lower the premium right away. It only does so later, through the reserve that has been built up.

The surcharge is charged from the calendar year after the insured person turns 21. Under § 149 VAG, it ends in the calendar year in which the insured person turns 60. No application is needed. It ends automatically.

When it ends, the gross premium falls by the surcharge, so by around 9 percent compared with the level before, based on the main premium. The pure plan premium remains and can continue to rise through plan adjustments.

The statutory premium surcharge under § 149 VAG is part of the total premium of private health insurance. For tax purposes, it is taken into account proportionally, to the extent that it relates to basic cover benefits, within the framework of § 10 EStG.

The insurer determines the deductible share of the premium and as a rule transmits it electronically to the tax authorities.

If you switch to another private health insurer, the statutory surcharge continues to be charged in the new plan as long as the statutory age conditions are met. The ageing reserve built up from the previous surcharge is part of the transfer value.

Of the other ageing reserves, by contrast, as a rule only the share set by law and based on the Basistarif is transferred. Before changing provider, you should therefore ask your current insurer in writing for the current transfer value and the long-term financial consequences and compare them with the new offer.

From more than 5,000 applications with health questions, we know a common question after the 60th birthday: why the premium suddenly falls. The answer is that the statutory surcharge has ended. The pure plan premium is not affected and can continue to rise.

We recommend that insured people from their mid fifties build the end of the surcharge into their personal cash planning for retirement. The effect happens once and is used up again by normal plan adjustments over the years.