The impact of Brexit on UK healthcare and travel

Contributed by Aetna International, 26 October, 2016

UK prime minister Theresa May likes to say that "Brexit means Brexit" – apparently meaning she will lead Britain out of the European Union, but in the method of her choosing. Although she recently announced that the process will start by March 2017, what it will involve remains unclear. And when it comes to healthcare provision for foreign nationals, the method she chooses will make a huge difference.

Currently, all EU citizens can access Britain's National Health Service at the same cost as British citizens – usually for free – as holders of a European Health Insurance Card (EHIC). Some countries issue national health insurance cards which double up as EHICs.

The scheme is a reciprocal arrangement. British residents, including foreign nationals who are "ordinarily resident" in the UK, can use an EHIC to access the public health services of other European countries for medically necessary healthcare on the same basis as the locals. Applying for an EHIC costs nothing, although scammers have set up websites which charge applicants to carry out unnecessary checks on their applications.

For those travelling between Britain and the rest of Europe, the EHIC scheme has meant greater convenience and lower health insurance premiums. It does not replace healthcare cover, which is needed for private provision (such as mountain rescue at ski resorts) and medical repatriation, and some insurers insist that buyers hold an EHIC.

For the time being the scheme remains in place, but before the June vote, the UK's Department of Health said that its continuation would be up for negotiation if voters decided to leave the EU. Beyond this, Brexit could have other impacts on foreign nationals seeking healthcare in Britain.

Brexit doesn't necessarily mean EHICxit

EHIC is not only used by the European Union, but also by the European Economic Area (EEA) countries Iceland, Norway and Liechtenstein, and by Switzerland – which is neither an EU or EEA member, but is part of the single market. If Brexit means Britain joining the European Economic Area (a kind of associate EU membership) or seeking a deal with the EU similar to Switzerland's (a far-reaching agreement, but less extensive than EEA membership), continued membership of EHIC looks highly likely.

Prime minister Theresa May has said she wants Britain to seek a customised deal. This still means there are strong incentives for both it and the EU to include EHIC membership. While there are many more non-British EU nationals in Britain (3.5 million) than there are Britons elsewhere in the EU (1.2 million) the first category is dominated by people of working age with relatively low health costs. Meanwhile, many of the Britons abroad are retired, typically with higher health costs per person. This means that the net cost of EHIC to the UK may be a lot lower than the overall population figures suggest.

Continuing the EHIC scheme would avoid extra administration costs and continue to encourage tourist and business travel between the UK and the rest of Europe. Furthermore, Britain has EHIC-style deals with countries other than those in the EU, including Australia, New Zealand, some former Yugoslav nations (such as Kosovo, Macedonia and Montenegro) and many of its overseas territories, so there is a precedent for this.

EHIC continuation would be the best outcome for anyone who is a resident of a European country, including ex-pats. But even if Britain did leave the EHIC scheme, it could choose to set up reciprocal arrangements with some EU countries: the Republic of Ireland, with which Britain shares a passport-free travel area, would be the most likely candidate. And given that health policy is made by the UK's four constituent nations rather than at national level, it is possible that the devolved nations might ask for specific deals. Northern Ireland, whose citizens can already choose between a UK and an Irish passport, might continue reciprocal arrangements with the Republic of Ireland. On a bigger scale, the pro-EU Scottish Government might seek to keep Scotland residents in EHIC to strengthen its links with Europe.

Crashing out

But while there are reasons to retain EHIC, there is no guarantee that Britain's membership of the scheme will survive Brexit in whole or part. One problem is that the UK government plans to impose controls on immigration from elsewhere in Europe, whereas all of the scheme's members currently allow free movement of European citizens across their borders.

And while a departure from EHIC would be one thing, Britain could also tighten access to its own healthcare services for foreign nationals in other ways. This might include cutting the NHS services currently available free to everyone in Britain regardless of their nationality, which currently includes accident and emergency treatment. It could also see a reconsideration of other reciprocal national health care arrangements; the UK recently ended those covering many eastern European countries and the deal with Barbados expires on 1 October.

Existing charges on visitors might also be extended. The NHS in England already bills visitors from outside the European Economic Area at 150% of its standard rates if they have not taken out health insurance. For those on temporary stays of more than six months, the UK recently started levying an immigration health surcharge of £200 a year, or £150 a year for students and their dependants10.

And then there are other potential impacts on British healthcare from Brexit. When early results made it clear that the UK had narrowly voted to leave the EU, the value of the pound plunged from $1.50 to $1.30. Britain has a strong pharmaceutical sector but it is part of a global industry, and the decline in sterling could lead to higher drug costs, with the same applying to imported medical equipment.

Another risk comes from the estimated 135,000 health and care professionals in the UK who are residents of other EU countries, representing about 5% of staff11. The government is yet to guarantee that they will be able to stay in post-Brexit Britain, and even if they are allowed to stay some may choose to leave if they feel unwelcome following Brexit.

Finally, if leaving the EU leads to a severe recession the government might just consider the future of the NHS as a largely free-to-access healthcare system by introducing patient charges. This is highly unlikely given the popularity of the NHS, and would be enormously damaging for a government that forced it through. However, health took 19% of all public sector spending in 2015-16, and has been protected while other areas have suffered significant budget cuts. [That figure also from the 2015-16 Budget] If tax receipts fell sharply, it might become impossible to continue to protect NHS spending.

On last par, it's very hard to provide even an opinion of which way things will go. (Most political opinions are 'it'll be great' or 'it'll be awful' based on which way the politician campaigned in the referendum.) But could spell this out a bit more like this:

Apart from a sharp drop in the value of sterling the prospect of Brexit appears to have had little effect on the UK economy and tax receipts so far, but it will be several years before its full impact will be clear. Changes to immigration and healthcare agreements will only become clear during the negotiations between the UK and the rest of the EU. It will be several years before the true impact of Brexit on healthcare becomes clear.

Disclaimer: The information included in this article is provided for information purposes only and it is not intended to constitute professional advice or replace consultation with a qualified medical practitioner.

Tags: agreements | business | Europe | budget | Insurance | Barbados | Macedonia | New Zealand | Switzerland | Iceland | Ireland | Montenegro | Australia | Liechtenstein | Norway | services | public health | public sector | insurance | health care | tax |



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