Healthcare card may avoid Brexit risk, but insurers could still see business opportunity

10 August 2016. By Lewis Crofts.

The little blue card in the pocket of every British student passing through Europe is one of the EU’s success stories: the holder has a right to the same treatment as any other citizen after tripping on a cobbled street in Prague or eating a dodgy pizza in Rome.

While its fate could be in doubt when the UK leaves the EU, Westminster’s new government is unlikely to jeopardize the highly prized card.

Nevertheless, insurers could yet see a chance to sell more travel cover.

The European Health Insurance Card — or EHIC — is a popular item in the wallets of UK citizens. As of January, more than 27.5 million cards were in circulation in Britain, according to government calculations earlier this year.

It gives the holder the right to access state-provided healthcare during a temporary stay in another European country, and covers treatment that is medically necessary until the holder’s planned return home.

But the card is underpinned by an EU regulation, casting doubt over its future when Brexit comes to pass. The National Health Service was quick to stress that June’s referendum result hasn’t stopped the card, and it is continuing to issue them.

Given UK citizens’ widespread use of the EHIC, the government will see the benefits in negotiating similar arrangements for life post-Brexit.

Countries such as Norway, Liechtenstein and Iceland are members of the wider European Economic Area — but not the EU — and they all accept the card. The UK could hope for a comparable deal.

But EEA membership involves a commitment to allow the free movement of people across borders — anathema to the winning Leave campaign — so the UK probably won’t replicate the EEA’s looser arrangements. And this, in turn, could jeopardize the EHIC.

If Britain’s future EU relationship is governed by a separate agreement, Number 10 could still negotiate the UK’s own EHIC terms. But this could depend on the willingness of EU members to continue recognizing the card’s validity in the long term.

Nevertheless, this is exactly what Switzerland has done, so the UK government may look to follow that path.

Reciprocal agreements

Indeed, even if the EHIC were to be scrapped, the UK has reciprocal healthcare arrangements with countries including Australia and Russia. That means the chances a tourist or student will be turned away by European hospitals after Brexit are slim.

Perhaps the key to the EHIC’s attraction — and therefore citizens’ demands it remain post-Brexit — is a misunderstanding of its scope.

Research by online insurance broker Go Compare before the referendum indicated that a quarter of those surveyed feared Brexit would spell the end of EHIC protection.

And the results also showed “people typically overestimate the benefits of the EHIC, often believing it provides ‘free’ medical care, which is not the case,” a spokesman told MLex. “Without travel insurance, holidaymakers could find themselves responsible for a medical bill, even if they have an EHIC.”

“The EHIC only covers emergency medical treatment in public hospitals, and in some countries is only valid for trips up to three months,” said Gemma Sonfield, head of travel insurance at comparethemarket.com, another insurance portal.

The EHIC doesn’t cover childbirth, repatriation, lost luggage or other travel eventualities.

“In some states such as France, the patient must pay upfront and then claim back 70 percent of the cost of medical care,” Sonfield said.

Market opportunity

Insurers could spot a market opportunity here.

Even if EHIC survives Brexit, there may be more doubts among cardholders about the cover it provides and the countries where it can be used. This could motivate more citizens to buy travel coverage in addition to having the EHIC in their pocket.

Arguably, they should have done this anyway, but myths about the EHIC’s omnipotence have often stopped that.

A new EU-UK agreement may amend the terms of the EHIC or even largely retain them, but insurers may be the winners either way as more holidaymakers and students take extra coverage, just in case the little blue card doesn’t do the trick.

	Eliot Gao