While the rules for anyone who has a registered S1, E121, E106 or E109 (which includes UK students and pensioners residing abroad) are somewhat different, most UK citizens planning travel to Europe in 2021 and beyond are now being urged to purchase travel insurance that includes medical cover before departing on any trips, as the EHIC – as it existed prior to 2021 – is no longer valid.
The UK government has also warned those with pre-existing medical conditions that it is ‘particularly important’ that they get travel insurance with the right cover as, while the EHIC scheme covered pre-existing conditions, many travel insurance policies do not.
The impact of this drastic change on travel insurance is, in many ways, obvious. With Brexit rendering the EHIC invalid, British travel insurers will no doubt see travel insurance uptake surge (in fact, they have been anyway, with the increased focus on travel risk that Covid-19 has brought about) as these people – who used to rely solely on the EHIC – begin to purchase travel insurance for their European getaways.
Although, worryingly, survey results from travel insurer battleface actually reveal that over one-third (35 per cent) of British adults asked were not aware that the EHIC would become invalid from 31st December 2020 – why are we not surprised?
On the other side of the fence, European travellers visiting the UK are also no longer able to access free emergency healthcare, which was also part of the reciprocal EU agreement. Still, European travel insurers, like British travel insurers, will no doubt also be optimistic about the prospect of increased penetration of their international travel insurance offerings – as long as they make a point to educate travellers on the importance of having travel insurance.
Should the EHIC not continue, insurers will of course be interested to see what the Government does to replace the loss of routine medical cover that EHIC gives UK travellers, and whether it will look to agree reciprocal health agreements with individual EU states, just as it already has with other countries, such as Australia and New Zealand
Whatever happens, policymakers will still need to prepare for all eventualities. Charlie Campbell, Manager, Health and Protection at the Association of British Insurers, assured ITIJ that travel insurers are ‘as ready as they can be for life after Brexit – whatever that looks like’. “For many travel policies, the loss of the EHIC is unlikely to immediately lead to a meaningful change to terms and conditions; any reference to the EHIC would simply be irrelevant and customers would still be able to make medical claims. However, for those policies where an EHIC must be in place and used, changes are likely,” he said.
“Pragmatically, insurers would look to make reasonable changes to policy wordings where necessary and to avoid customer confusion,” Campbell added. The ABI noted that the most recent announcement that would see the UK government create a temporary healthcare scheme for people who need 'ongoing, routine healthcare treatment' was 'welcome news' for customers that fit that description. “However, with or without the EHIC system, travel insurance is essential for overseas trips as emergency medical costs, including emergency repatriation back to the UK, can run into tens of thousands of pounds,” the ABI said.
Longer term, Campbell noted: “Should the EHIC not continue, insurers will of course be interested to see what the Government does to replace the loss of routine medical cover that EHIC gives UK travellers, and whether it will look to agree reciprocal health agreements with individual EU states, just as it already has with other countries, such as Australia and New Zealand.”
A change in payer-provider relationships
With great power comes great responsibility, as they say. While travel insurance penetration looks likely to surge for British insurers, so does the number of travel insurance claims, especially if we know anything of the antics that Brits supposedly like to get up to while abroad.
From an international assistance point of view, it seems likely that travel insurance in place of the EHIC could ease the pressure on public hospitals in popular European holiday destinations: “In the tourist areas of Spain [for example], the private clinics and hospitals may be able to relieve the strain of a heavy volume of emergency patients in the public hospitals in summer,” Jane Priestley of Clinica Bofill’s international patient department, told ITIJ. She noted that, in many ways, the loss of the EHIC could strengthen relationships between international insurers and healthcare providers, as these private facilities often provide better communication and access to medical information, and shorter wait times, as well as being able to offer ‘favourable prices’ to travel insurance companies – ‘especially when there is a large volume of patients’, she added.
In pure medical terms, we can assist and support our customers more effectively in a private facility than is often the case in a public hospital
AXA Partner’s Global Head of Cost Containment Ian Jones had a similar line of thought: “We have a comprehensive medical provider network globally and particularly in Europe. In pure medical terms, we can assist and support our customers more effectively in a private facility than is often the case in a public hospital. Access to the patient and access to regularly updated medical records can be challenging in public hospitals.”
He noted that one of the strategies therefore under review is the guidance and directional care of customers.
However, Priestley also mused upon whether policymakers would improve their offerings by eliminating the policy excess for emergency hospital treatment, and if they would find a better way of completing the GP check to avoid delays in sending out GOPs – something that Priestley notes has long been an issue, and one that affects the trust a provider has in its agreement with a payer.
No doubt receiving public hospitals will be relieved to no longer have to front the medical costs of British citizens abroad, but could we see an increase in medical insurance fraud on the part of both travellers and medical institutions, as well as other issues related to payment? Jones tells ITIJ that travel insurers will be ‘watching carefully’ how public hospitals will react to insured and uninsured travellers, and wonders what their pricing strategy will be and how aggressively they will pursue payment. “Will we see an emergence in some European countries of demanding credit card details, passport confiscations , and the like? We hope this won’t be the case as we haven’t experienced this in EU countries up to now,” he added.
“Now, more than ever, it will be important for customers to call us before receiving treatment so that we can be sure that they are being cared for in the right place; that direct billing arrangements are in place; and the customers are not going to be put under any financial duress,” said Jones. One thing is almost certain: the cost of insurance for travel in Europe will rise with the increase in medical claims. And, as Martin Ashford of the UK's Chartered Insurance Institute said this time last year, there may also be additional claims for delayed or missed departures due to additional checks at airports, stations and ports. Let's hope the UK manages to secure some reciprocal health agreements with European countries soon.