How are excesses in health insurance taken into account for tax purposes?

Individuals with private health insurance often pay medical bills up to a certain amount out of their own pocket to preserve the premium refund, which can often amount to up to six months' premiums. Although the premium refund reduces the deductible insurance premiums for the special expenses deduction, resulting in a lower tax saving.

However, many believe this disadvantage can be offset by claiming the self-borne medical expenses as extraordinary expenses according to § 33 EStG, thereby achieving a corresponding tax saving.

Medical expenses borne by the individual due to a tariff-based deductible or the choice of a premium refund are not "contributions" to health insurance and therefore cannot be deducted as special expenses (BMF letter dated 19.8.2013, BStBl. 2013 I p. 1087, para. 69). The BFH has also confirmed that self-borne costs in the event of illness do not constitute insurance contributions and cannot be deducted as special expenses.

These are not "contributions" to health insurance. Rather, they are medical expenses and can only be claimed as extraordinary expenses according to § 33 EStG (BFH ruling of 1.6.2016, X R 43/14).

Medical expenses borne by yourself are medical costs and can therefore only be deducted as extraordinary expenses according to § 33 EStG. However, there is a restriction: they do not have a tax-reducing effect up to the amount of the reasonable burden.

This reasonable burden depends on your income, the number of children, your marital status and amounts to between 1 and 7% of the total income. It is therefore generally higher than the anticipated premium refund from the health insurance and the corresponding self-borne medical expenses.

This means: Medical expenses up to the deductible are neither deductible as special expenses nor as extraordinary expenses.