4Reciprocal healthcare
Uncertainty and distress
93.In its written evidence the Department of Health explained the principles under which the EU system of reciprocal healthcare operates:
Healthcare entitlements under EU law are tied to those of wider social security benefits - if a benefit (or pension) entitlement is exportable to another European Economic Area (EEA) country, healthcare entitlement automatically follows. These benefits are reciprocal and apply both to UK citizens in the EEA (plus Switzerland), and EEA (plus Switzerland) citizens in the UK. This includes European Health Insurance Cards (EHIC) which cover those temporarily in another EU country.
Entitlement to reciprocal healthcare under the EU rules depends on the concept of insurability–that is, which state is responsible, under the scope of the EU rules, for covering the cost of an individual’s healthcare. The central point of these arrangements is that the costs of healthcare are borne by the country in which the individual is ‘insured’, and where healthcare services are used in another European country, they are essentially provided on behalf of the individual’s home state–the treating country will bill the ‘home’ country.96
94.The evidence we heard showed that there could be a significant impact on individuals as well as the NHS and social care if after Brexit people insured by the UK were to be obliged to return to the UK for care.
95.Speaking on behalf of a range of groups that represent British nationals in the EU, Christopher Chantrey, a British resident of France, said that it is “absolutely essential” that reciprocal arrangements are not dispensed with.97 Mr Chantrey noted that many British pensioners in countries such as Spain and France have low incomes and would not be able to afford to replace their existing healthcare arrangements with private insurance.98
96.Expanding on this theme, Christopher Chantrey explained in oral evidence why the Government’s position as expressed in the Brexit White Paper that “no deal is better than a bad deal” may not be acceptable for British retirees in R-EU:99
If you have a pre-existing health problem, how will you get private insurance if the UK no longer pays for the cover you contributed to all your working life in the UK? The host country will not do it, because you have not contributed to that system. That is why the Europe-wide system of co-ordination exists in the way it does. [ … ]
The cliff edge has dramatically awful consequences. How can anybody say—I am afraid this was in the White Paper—that no deal would be better than a bad deal? It is the reverse. No deal would be far, far worse than a bad one; it is the worst possible deal. This will affect hundreds of thousands of UK citizens who have moved out there and are receiving their pensions and healthcare. They moved out in good faith on the implicit promise that these arrangements would continue. Suddenly, something happens that brings those arrangements to an end. It is absolutely terrible for many people.100
Impact on vulnerable people
97.Professor Martin McKee provided us with a comparison of the reciprocal agreements the UK has with nations outside the EU/EEA. He described the extent of their limitations and highlighted why “healthcare is the principal concern of hundreds of thousands of UK pensioners living in other EU member states”101:
None of these is fully reciprocal, because they do not give the same entitlement. Australians in the United Kingdom have free access to general practitioners, but not vice versa. [ … ] All these things are possible, but compared with the unified single system of the EHIC, they introduce a greater burden.102
98.Within the evidence submitted to our inquiry there was a wide range of examples of the risks facing vulnerable people if they cannot access free healthcare or suitable insurance post Brexit. Professor McKee described in oral evidence the problems and costs that would face British people making trips to R-EU in the absence of the European Health Insurance Card (EHIC):
If as a British tourist you want to travel to France you are covered, and vice versa. Therefore, our tourism industry will get a lot of people who come here. They will perhaps have pre-existing conditions, but they will not require healthcare. I put in a few co-morbidities, like diabetes and a history of mild depression, to see how much I would pay for health insurance for a one-week stay in France. It came out at between £800 and £2,500.103
99.We received evidence from a retired British national, resident in Germany but insured by the UK, who lives with epilepsy and has done so for most of his adult life. Given the personal nature of the evidence we have chosen not publish this submission, but the witness succinctly described the significant disruption to his life that will arise if reciprocal arrangements are not maintained. Without a comprehensive reciprocal healthcare arrangement, this witness said that his access to care would be compromised and his inability to pay for health insurance would call into question his legal residency in Germany.104
100.Expat Citizens Rights in the EU (ECREU), an organisation of 6,000 members from 25 EU countries, argued in its written evidence that the loss of reciprocal health and social care arrangements would leave some retirees “destitute”.105 In oral evidence Christopher Chantrey said that many British retirees have very low incomes and if forced to return to the UK would do so “in a state of poverty”.106 Professor McKee agreed, highlighting the fact that many British residents of Spain live in properties which now have very little value:
Many will come back in a state of poverty because they bought properties in Andalusia and other places. The massive glut in the market already will be exacerbated by all the British people leaving, so that property will be essentially worthless. They will be throwing themselves on the mercy of the state when they come back.107
101.The Papworth Trust, a disability charity and registered social landlord, submitted written evidence which argued that disabled people may be more severely affected by the loss of reciprocal healthcare rights then other groups. It said that a dilution of the existing arrangements could prevent some disabled people from travelling and / or working abroad:
Disabled UK citizens working or living in the EU are currently entitled to access social and health care in their host country and receive the same treatment as nationals of that country with disabilities. This has been an essential safety net for many, who have been given the confidence to live, work, study or travel abroad. Any loss of a UK citizen’s future access to healthcare in an EU/EEA Member State would constitute a major barrier to their travel to the EU to live, work or even take a holiday. [ … ]
Even if the UK follows the model of Switzerland and seeks to negotiate a form of European Health Insurance which allowed citizens to access state-provided healthcare in EU/EEA countries during a temporary stay, such a scheme would not benefit disabled UK nationals living in an EU/EEA Member State permanently.108
102.Echoing Professor McKee’s commentary, Macmillan Cancer Support said in its written evidence that travel for people living with cancer could become prohibitively expensive if the reciprocal arrangements are not continued.109 It is estimated that over 2 million people in England are living with and surviving cancer and Macmillan said that private health cover may not be a viable option for those wishing to travel.110
103.The British Association of Counselling and Psychotherapy highlighted in its written evidence that reciprocal healthcare extends beyond physical ailments and this is of particular relevance to the large number of British pensioners resident in other EU member states:
Of particular concern to BACP is the healthcare of the number of pensioners who have chosen to retire to the EU. The wellbeing of older people is often highly complex; for example, they can present with a co-morbid mental and physical condition. Dementia is also a serious condition mainly faced by older people. Research shows dementia affects one in every six people over 80, and one in three over 95. Furthermore, one in three people over 65 will die with a form of dementia. It is imperative that the healthcare of these individuals is not compromised.111
Negotiation and bilateral agreements
104.Looking at how the European Commission and member states will approach the negotiations, Christopher Chantrey argued that it would suit the remaining EU member states to maintain the existing arrangements:
The EU member states do not want to have to invent a new system just for Britain; they have a system that works to their satisfaction among 28 member states. There will be 27 member states in the future. Those 27 do not want to have to change the system they have; they find it works perfectly all right. If you are French and have an EHIC and go to Italy, that works.112
105.Evidence from the NHS Confederation indicated that it believes that the existing arrangements the UK enjoys as an EU member could be replaced by individual agreements. The Confederation’s written evidence said that “If the UK were to leave the EU single market, these systems would in principle no longer apply in the future, unless bilateral agreements were negotiated.”113
106.This consideration was also alluded to by Professor Martin McKee who explained that making use of bilateral agreements may not be a straightforward process for the UK to pursue:
Bilateral agreements could be reached, but there are many elements of health policy that are European competences, so you get into the difficulty of jurisdiction. Some of it could be done, and you might revert to pre-existing agreements. It is not clear whether you could revert to the pre-existing agreements.114
107.Under the EU regulations on the coordination of social security, member states can make bilateral arrangements for applying the Regulation in practice. Paul MacNaught described how the bilateral agreements in relation to reciprocal healthcare operate:
There are 27 of them, because the way the system works is that regulation 883 is the overarching framework, and then underneath that each member state reaches a bilateral arrangement with every other member state about the basis on which costs are going to be claimed or charged—for example, whether it is going to be average or fixed costs or actual costs.115
108.It was confirmed by Paul MacNaught, however, that the future of reciprocal healthcare arrangements will be determined by arrangements under a UK/EU deal. The negotiation will take place with the EU as the question of reciprocal healthcare arrangements will be addressed as a joint competency.116 A resolution of the European Parliament has forcefully stated that bilateral agreements could not be negotiated whilst the UK remains a member of the EU and negotiation must take place with the EU 27.
109.The Secretary of State maintained an optimistic tone in his approach to the negotiations with the EU:
It is perfectly possible to agree the continuation of reciprocal healthcare rights as they currently exist, but it is not possible to predict the outcome of the negotiations.117
110.The principle of the Secretary of State’s position was not disputed in the evidence we heard, but the question of dispute resolution was highlighted as a potential stumbling block. Professor Martin McKee provided a view as to the implications for the United Kingdom if an agreement was reached whereby the existing reciprocal arrangements continued virtually unchanged:
The question that has to be asked is: if the UK is to continue to buy into or have arrangements under that system, how will it work? It will change over time as the EU position changes. Will it be, as in the case of Norway, essentially government by fax, as it is called, where they simply accept all EU legislation, including court judgments, and it is incorporated?
The second issue is dispute resolution. Who will resolve disputes? The Prime Minister has said she does not want the European Court of Justice to do it. If that is not the case, I cannot think who else will do it. I think she has also ruled out the EFTA Court. [ … ] it is very difficult to see how you could continue to keep the EHIC system until you have resolved the issue of the evolution of European Union policy in the future and the dispute resolution process. As the two simplest ways of doing that have been ruled out by the Prime Minister, I do not see how you can do it.118
Contingencies and residual rights
111.The future of reciprocal healthcare arrangements will be determined in the negotiation between the UK and the EU. The UK does have reciprocal agreements, such as those with the Republic of Ireland, which pre-date our EU membership. Professor McKee, however, suggested that they would be far from comprehensive if relied upon as a contingency:
Of course, we have a number of agreements that predate the European Union that we could fall back on, but each of those has different terms and conditions, different eligibilities, different limits and different numbers of people who can be covered.119
The status of these agreements and their applicability if no deal is agreed with the EU remains unclear.
112.Even if no deal is agreed, in some cases British insured people in other member states will retain entitlement to some aspects of healthcare via the domestic legislation of the countries in which they are resident.120 Such rights, however, would be by no means universal and enforcement of entitlements is likely to be problematic.121
113.Because different residual rights apply in different EU member states, it is important that UK insured people are provided with timely and accurate information. Paul MacNaught told us that efforts have been made by the British Government through embassies and consulates to communicate information about healthcare rights to people insured by the UK living in the EU.122 Mr MacNaught added that more information will be provided as “soon as there is more to say”.123 The position regarding residual rights in each EU member state is clear, if complex, now. Given the extent of the risk we believe more needs to be done to ensure that people understand how their rights might be affected so that they can begin to plan for different scenarios in the future and make their own contingency arrangements.
114.The impact Brexit will have on people who rely on the EU’s reciprocal healthcare arrangements should not be underestimated. Not only would travellers and holiday makers potentially lose cheap and easily accessible care provided under the European Health Insurance Card, we heard in evidence that retired British citizens in the EU, disabled people, and people with multiple conditions could face particular challenges.
Costs of reciprocal healthcare
Payments and receipts
115.As a consequence of our call for evidence we received and heard evidence which suggested that Brexit could help the NHS in England redress the balance in terms of costs of reciprocal healthcare arrangements.124 There is a significant disparity in the sums paid by the Department of Health to other EU nations for UK insured persons and the revenue recouped from the rest of the EU. In 2015 member state claims against the UK amounted to £674 million whilst UK claims against member states were £49.7 million.125
116.Paul MacNaught explained that the disparity is largely a consequence of “the volume of UK insured pensioners living in other EEA countries compared with the volume of EEA insured pensioners living here.”126 Mr MacNaught provided a breakdown of the costs against the number of UK insured pensioners resident in other EU countries:
The actual amounts we pay in any given year are greatly affected by the exchange rate, but, if we are talking in general terms, we spend about £650 million a year on the reciprocal healthcare arrangements. Of that, about £500 million is on pensioners, so that is UK insured pensioners, of which there are about 190,000 in other EEA countries. I think the figures there are 70,000 in Spain, 44,000 in Ireland, 43,000 in France and about 12,000 in Cyprus. Those are the main countries. The other £140 million is spent on the people who hold EHIC cards, of which there are 27 million holders of UK issued cards. Then there is about £6 million on the dependants living elsewhere in the EEA of workers who are working in this country.127
117.Whilst the cost of treating EU nationals was a matter of contention we received no evidence that EU reciprocal arrangements were being systematically abused. We note, however, that the challenge of accurately recouping costs of care is more considerable for patients from outside the EU than for those within. In February 2017 the Government announced new measures to recoup the costs of care to the NHS from overseas visitors which included an ambition to retrieve an additional £500 million.128
118.The Committee of Public Accounts (PAC), however, has put the Government’s target of £500m in the context of the national acute trust deficit of £2.45bn in 2015–16. In addition the PAC heard in evidence that £500m is not a fixed target:
The Department explained that the £500 million target should not be regarded as overly scientific, and was a top-down calculation based on assumptions about the number of visitors and the amounts charged. [ … ] The Department emphasised, however, the underlying principle that the NHS should charge the right amount, which might be higher or lower than £500 million a year. It viewed £500 million as a stretch target to create a culture within the NHS where people did charge the right amount.129
119.Speaking about the treatment of EU nationals, the Secretary of State said in oral evidence in January 2017 that there are no plans to implement new charging systems for EU nationals post Brexit.130 This position implies that even if it became desirable to charge EU nationals as part of future arrangements it may be by no means be practical. Professor McKee explained that the NHS is not set up to charge patients in large numbers:
In many parts of the country, there will be a very small number of patients who will have to pay. You will have to put in a system. It is not as if a hospital has one front door; it will be for every outpatient clinic and every ward. Remember that the NHS is cheap because we do not have linked systems. Most other health systems that spend a lot more do so, at least in part, because of the transaction charge costs.131
120.In addition Professor McKee argued that as it stands charging overseas patients from outside the EU may not be a profitable exercise. His research team had just completed
a study, which is under review at the minute, where we submitted freedom of information requests to every acute trust in England to ask them how much they spent collecting money from overseas patients and how much they recovered. Most of them were spending more money than they were recovering. They had a very low level of recovery, but as time went by they found they were often trying to recover from people who were entitled anyway.132
121.Paul MacNaught made the case in evidence that a successful outcome to the negotiations from the perspective of the Government would be a continuation of the existing arrangements post Brexit:
a key objective in the negotiations ahead is to guarantee the rights of existing residents. With a fair wind, we might not need to do a wholesale reorganisation of these arrangements. The way the arrangements are organised at the moment, there is regulation 883, which is quite a complicated set of entitlements, and the administration of that in this country involves a team of about 120 people employed mainly through DWP and the NHS Business Services Authority, which gives you a sense of the scale of the activity.133
122.It is perhaps unsurprising that the Government would like to maintain the existing arrangements given the financial benefit it delivers to the UK. The evidence indicates that the cost of paying for the treatment of British pensioners in the EU is substantially cheaper than if they were being treated in the UK. Professor McKee explained that “measuring the comparability of costings across Europe is extremely complicated” because “people who move abroad tend to be healthier when they move. They also tend to be somewhat more affluent, because they buy somewhere abroad.”134
123.Speaking on behalf of British expatriates, Christopher Chantrey observed that there are some ways in which the NHS may benefit from large numbers of British nationals receiving healthcare abroad:
In France, the basic reimbursement level is, let’s say, 70% for a GP, so 30% is borne by the patient, and that is the co-payment. The 70% is all that the NHS would be charged.
A further point is that the capital costs of creating facilities—the resources used for medical procedures, hospitals and so on—are borne by the host country; [ … ] It means that in those countries the NHS is paying for certain treatments for S1 and EHIC beneficiaries on a variable cost basis only.135
124.Paul MacNaught’s evidence confirmed that overall the average cost of treatment for a UK insured pensioners in the R-EU is significantly less than the cost of treatment in the NHS:
The average cost that Spain charges the UK per pensioner signed up to these arrangements is about €3,500 currently. Ireland charges about €7,500. Our cost in the UK is about £4,500, so let’s say €5,000. Overall, the average cost, if you take the £500 million for pensioners and 190,000 pensioners, works out at about £2,300 per pensioner under those arrangements, which is significantly lower than the average cost of treating pensioners in the UK.136
Conclusion
125.Far from being a drain on the public purse, the provision of care to UK insured persons in the 27 other member states represents excellent value to the British taxpayer. Moreover citizens across the EU can readily access vitally important, high quality healthcare without encountering financial or bureaucratic barriers. Just as this allows someone from the EU to work in the UK, it enables a British pensioner to retire to France, Spain or Italy.
126.It is in the interest of many hundreds of thousands of British people living across the EU to maintain simple and comprehensive reciprocal healthcare arrangements. The Government’s negotiating objective should be preservation of the existing system of reciprocal healthcare so that EU nationals in the UK and people insured by the UK in other EU countries can maintain their access to healthcare.
97 Q 143
98 Ibid
100 Q 157
101 Q 156
102 Q 146
103 Q 134
104 BRE 07 (Unpublished)
106 Q 143 (Mr Chantrey)
107 Q 143 (Professor McKee)
110 Ibid
112 Q 137
114 Q 139
115 Q 337
116 Q 332
117 Q 117
118 Q 137
119 Q 136
120 Cayon-De Las Cuevas, J. and Hervey, T.K. (2017) 12 (3) A Place in the Sun. Health Economics, Policy and Law. ISSN 1744–134X (In Press)
121 Ibid
122 Q 341
123 Ibid
126 Q 302
127 Q 309
128 Recovering the cost of NHS treatments given to overseas visitors, Department of Health press release, 6 February 2017
129 House of Commons Committee of Public Accounts, Thirty-seventh Report of Session 2016–17, NHS treatment for overseas patients, HC 771, para 6
130 Q 96
131 Q 182
132 Q 149
133 Q 300
134 Q 162
135 Q 162
136 Q 342
27 April 2017