Top-tier plans in private health insurance: when first-class benefits pay off

Every insurer arranges its plans in levels, from the entry level through the comfort level up to the top-tier plan as the highest level. The top-tier package usually includes billing of medical services above 3.5 times the rate of the medical fee schedule, treatment by the chief physician and a single room in hospital, a high budget for therapeutic remedies and free choice of hospital, also beyond the nearest one.

The difference from the middle of the market rarely lies in basic care but in how far optional benefits are reimbursed. Mid-market plans often limit doctors' fees to 2.3 times the rate, the standard maximum rate. This is exactly where the gap arises in case of treatment that top-tier plans close. Another typical feature is that there is no deductible, because out-of-pocket shares are not meant to reduce the comfort. One example of such a top-tier plan is GesundVario from the Bayerische Beamtenkrankenkasse (BBKK).

Therapeutic remedies include, for example, physiotherapy, remedial exercise, manual therapy, occupational therapy, speech therapy, podiatry or manual lymphatic drainage. In private health insurance, what matters is not only whether therapeutic remedies are reimbursed, but above all up to what amount. Many plans pay 100 percent but limit reimbursement to certain maximum rates, for example the federal allowance rules for civil servants, the insurer's own price list or so-called reasonable rates. If the private price is above the maximum amount that can be reimbursed, the insured person pays the difference. For therapeutic remedies, a top-tier plan should therefore not be judged only by the percentage. What counts is the specific basis for reimbursement.

Doctors and dentists bill private treatment according to the medical fee schedule (GOÄ) or the dental fee schedule (GOZ). Each service is charged with a multiplier. Many plans reimburse up to the maximum rate, and stronger plans also above it if there is a medical reason. Especially with specialists, complex treatments, dental services or optional hospital benefits, bills can be above the standard rate or even above the maximum rate.

The extra premium of a top-tier plan compared with the standard level is typically 30 to 50 percent. As a guide value, a 40-year-old pays approx. €600 per month in a standard plan and approx. €780 to €900 in a top-tier plan. The premiums given are guide values.

Two effects are often overlooked in the decision. Top-tier premiums rise more steeply with age, so today's extra premium keeps growing in absolute terms. And every premium adjustment has a bigger effect in euros, because it applies to a higher base premium. We recommend that you do a ten-year projection with realistic assumptions about adjustments before you choose. The higher savings share, on the other hand, has a positive effect. Top-tier plans build up more ageing reserves in absolute terms, which dampens the rise in old age.

If you are looking for the best benefits, assess the components one by one. Treatment by the chief physician secures treatment by the hospital's specialist who is entitled to bill privately. The single room is pure comfort, but in everyday hospital life it is the most noticeable difference. The rate of 3.5 times the GOÄ pays off with specialists who regularly bill above the standard maximum rate. Renowned specialists in particular often justify the maximum rate. The limits on therapeutic remedies can mean a high out-of-pocket share when you make a claim.

If you do not actively use any of these components, the top-tier surcharge mainly buys you options.

The logic of use gives clear indicators. Points in favor are regular treatment by specialists, for example more than two appointments per year with specialists who bill above the standard maximum rate, a foreseeable hospital stay with a wish for optional benefits, or a high, recurring need for alternative practitioners.

A profile that hardly uses benefits speaks against it. For healthy people, the middle comfort level almost always pays off better. In families, too, it is worth looking at the total. A comfort plan for everyone is often cheaper and in everyday life more balanced than a top-tier plan for one person and a standard plan for the rest. A top-tier plan is never better across the board. It is a decision about use.

In our advice work we see a recurring pattern: young, healthy applicants choose the top-tier plan out of caution, but do not use the top-tier components for years.

We recommend that young insured people choose a middle comfort plan instead and invest the difference in premium compared with a top-tier plan in a premium relief plan. In the long term, that is often the better lever than top-tier comfort today. The way up stays open, even if it costs new health questions for the extra benefits.

Yes, you can apply at any time with your own insurer to switch to a higher plan level. For the extra benefits, however, the insurer may ask new health questions and charge a risk surcharge. This is therefore easiest while you are healthy. If your plan includes an option plan, you can switch to a top-tier plan at certain times without health questions.

Some do. Some top-tier plans contain clauses that reimburse fees from a separate fee agreement above 3.5 times the rate. This cannot be taken for granted. It is a distinguishing feature within the top-tier class and worth a close look at the policy conditions.

Yes. Under § 204 VVG, you can switch to a cheaper plan with the same insurer without new health questions, and your ageing reserves are kept in full. Only the way back up costs new health questions again.