First annual report on payments made under the Healthcare (European Economic Area and Switzerland arrangements) Act 2019 for the period 31 December 2020 to 31 March 2021.
The Healthcare European Economic Area and Switzerland Arrangements Act 2019 (HEEASAA) provides the Secretary of State with a legal framework to implement comprehensive reciprocal healthcare agreements with countries in the EEA and with Switzerland following the UKs departure from the European Union.
Under Section 6 of the 2019 act, the Secretary of State has a duty to lay an annual report before Parliament providing details of payments made under the powers conferred by or under the act. The report must be laid before Parliament as soon as practicable after the end of each financial year.
This first annual report covers the period between the end of the EU exit transition period on 31 December 2020 and the end of the financial year on 31 March 2021. Future reports will cover payments made under the 2019 act for subsequent financial years.
For this first report, very limited expenditure took place under the 2019 act due to the lag in receiving claims from member states. All EEA expenditure for the financial year 2020 to 2021 including that incurred under EU law (Regulation 883/04) as well as payments under the 2019 act are covered in the departmental annual report and accounts, published on 31 January 2022.
Reciprocal healthcare agreements with other countries strengthen international healthcare cooperation. They support UK residents to access necessary and emergency healthcare when they travel abroad and can facilitate cooperation on planned treatment and other areas of healthcare policy. They support tourism and short-term business travel and can particularly benefit those with long-term health conditions. The most frequently used element of reciprocal healthcare for UK residents, and the most familiar, is the access to necessary healthcare in other countries.
Following the UKs departure from the European Union, the UK government reached an agreement with the EU to ensure that UK residents will continue to benefit from reciprocal healthcare arrangements when in the EU.
Under the powers in the 2019 act, the government implemented separation agreements with the EU, Switzerland, and the EEA EFTA states (Norway, Iceland and Liechtenstein), namely the UK-EU Withdrawal Agreement [footnote 1], the UK-Switzerland Citizens Rights Agreement [footnote 2] and the UK-EEA EFTA Separation Agreement [footnote 3]. These agreements ensured there was no cliff-edge for citizens rights, including reciprocal healthcare rights, when the UK departed from the EU by protecting those with residence rights.
The government subsequently agreed further comprehensive arrangements with the EU and Switzerland, which have been implemented using HEEASAA powers. These provide reciprocal healthcare coverage to those travelling to the EU and Switzerland. These agreements (The Social Security Coordination Protocol to the UK-EU Trade and Cooperation Agreement [footnote 4] and the UK-Switzerland Convention on Social Security Coordination [footnote 5], respectively) mean continued healthcare support for UK residents when they travel or move to the EU or Switzerland.
Finally, the UK negotiated a memorandum of understanding (MOU) in 2020 with Ireland on reciprocal healthcare, which is also implemented under the powers under the 2019 act. This MOU was negotiated with partners in Ireland to ensure continuity of most elements of reciprocal healthcare in the event of no negotiated outcome with the European Union on a future relationship. It specifically recognises the unique relationship of the UK with Ireland and broader common travel area arrangements. Following the agreement of the EU arrangements, the UK and Ireland have agreed that the provisions in the trade and cooperation agreement will apply for reciprocal healthcare, but with some enhanced elements to support further cooperation.
The UK is currently negotiating a further agreement with the EEA EFTA states of Norway, Iceland and Liechtenstein. Once negotiated, this agreement will also be implemented under the powers under the 2019 act. UK nationals can use their passports to access necessary healthcare in Norway in the meantime.
In summary, the UK has successfully negotiated and implemented 6 agreements under the powers conferred under HEEASAA with countries and blocs in Europe. In the future, it is expected that further agreements will be reached with countries in Europe and outside of Europe. The government has brought forward provisions in the Health and Care Bill to enable the government to implement comprehensive healthcare agreements with countries outside of the EEA and Switzerland.
Where the UK or an EU member state is responsible for the healthcare of an individual, they will be entitled to reciprocal healthcare cover.This includes certain categories of cross-border workers and state pensioners who retire to the EU.
In summary, the agreements in place during the report period cover:
the healthcare costs of UK-insured state pensioners and their dependants living in the EEA and Switzerland around 201,000 [footnote 6] in total. These are known as S1 arrangements
individuals exporting benefits to the EEA and Switzerland (and their dependants) whose healthcare is funded via the S1 form around 7,200 [footnote 7] in total
around 42,000 [footnote 8] workers from the UK who are on a temporary posting in the EU and access healthcare using their EHIC and GHIC [footnote 9]. There are also around 2,100 [footnote 10] S1 certificates issued to workers or their dependants to access healthcare in the EEA and Switzerland, although there may be overlap between these 2 groups
The cost of necessary healthcare (EHIC and GHIC) of UK-insureds of approximately 67 million visits to member states each year once travelling patterns return to their long-term trend [footnote 11]. UK nationals can also use their passports to access necessary healthcare in Norway
We also fund around 1,300 to 1,500 UK residents per year to travel overseas to receive planned treatment in member states (such as, for procedures unavailable in the UK within a medically justifiable timescale or returning home to give birth) [footnote 12]. These are known as S2 provisions
Prior to EU exit, the UK was obliged to reimburse healthcare costs for which we were liable under Regulation (EC) No 883/2004 and in accordance with procedures set out in Regulation (EC) No 987/2009. Treatment in the EEA and Switzerland incurred since 31 December 2020, for which the UK is liable, is now mainly reimbursable under the 2019 act.
For the reporting period of this report, the UK has been responsible for funding those covered by the separation agreements and the social security coordination protocol to the UK-EU trade and cooperation agreement [footnote 13] (including the MOU with Ireland). The UK-Switzerland social security convention came into force in November 2021 and therefore no payments have been made under this agreement during this reporting period.
Different reimbursement mechanisms are in place for the different reciprocal healthcare provisions and vary by member states. Table 1 below outlines the specific detail for each member state.
For necessary healthcare, our reciprocal healthcare arrangements enable the UK to charge EEA and Swiss states based on the actual costs for the use of NHS services or to agree an alternative form of charging, such as cost-waiver agreements (where each country underwrites the healthcare costs of the services used by people of the other state) or formula agreements (where a model is agreed between the UK and a member state based on factors such as travel numbers).
The UK has formula agreements in place to estimate the value of NHS services used in the UK by temporary visitors from Spain, France, Portugal, Belgium, Sweden and Ireland, and the UK has opted to enter into cost waiver agreements with some of the smaller member states, such as Norway and Malta, where the total flow of people between the UK and these states is broadly similar in both directions.
The UK pays the actual costs for all those receiving planned treatment (S2).
Pensioner healthcare (S1) is charged at an average cost in Cyprus, Portugal, Spain, Ireland and Sweden, and actual cost (or through the waiver) for all other member states and Switzerland. Workers eligible for an S1 are all charged at actual cost.
Table 1: EEA Switzerland reciprocal healthcare payment arrangements
In terms of the payments, all EEA healthcare payments (including those under the 2019 act) are made in arrears, usually between 1 to 3 years after the event.
If, for example, a UK national were to injure themselves on a holiday in Germany, they would present their GHIC at the German hospital and receive the necessary treatment. The hospital would then raise an invoice for the treatment with their liaison body. In the case of the UK, this liaison body is the NHS Business Services Authority (NHS BSA). The German liaison body would then submit a claim for the cost of that treatment to the UK based on receipts of the invoice from the hospital. Once the UK is satisfied that the claim is accurate and valid, the UK would release the payment to Germany. This process takes at least one year.
Routine payments for treatments covered under the 2019 act are therefore unlikely to begin until early 2022, one year after the agreement came into force.
For the reasons outlined above, the only payments made under the HEEASAA legislation for the period between 11pm on 31 December 2020 and 31 March 2021 were for discretionary planned treatment care. These payments are made outside of the regular payments process and are therefore paid in a shorter time frame. Expenditure is outlined in Table 2 below.
Payments for discretionary planned treatment are made to support the healthcare needs of British residents when they are abroad in circumstances which fall outside of a reciprocal healthcare agreement. They are most likely to be used when the refusal to fund healthcare treatment would result in unjustifiably harsh consequences for the individual.
Table 2: Payments made by the UK government under HEEASAA for financial year
Alongside payments under HEEASAA, EEA payments have also been made for reciprocal healthcare claims from member states, which took place whilst the UK was still a member of the EU, during the 2020 to 2021 financial year. These payments do not fall under the 2019 act and are outlined in the DHSC annual report and accounts: 2020 to 2021
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