The UK and sickness insurance for mobile citizens: An inequitable mess for Brexit negotiators to address

By Gareth Davies

As the Brexit negotiations become a reality, the position of UK citizens living in other EU states, and of EU citizens living in the UK attracts ever more discussion, particularly within the UK, where there has been great political support for the idea that those already established in the UK should not simply be thrown out. Nevertheless, aspects of UK procedure and bureaucracy are making it extremely difficult for Union citizens to obtain recognition of their right to reside. At the heart of this is the lack of a UK population register and of any registration requirement, meaning that most Union citizens moving to the UK do so without formalities. That may seem refreshingly easy at first. However, it means that if a Union citizen wants the UK to recognize that they have a right of permanent residence, they have to prove retrospectively that their last five years have been both in the UK, and in compliance with the terms of the Citizenship directive. That raises enormous evidential problems. One of these is to do with sickness insurance: while taking no active steps to require this from new arrivals, the UK takes the view that only those who were privately insured against almost all medical risks were actually lawfully present. This comes as a nasty shock to many migrant citizens – most of them, like over 90% of UK citizens, use the National Health Service rather than private insurance. The discussion below explains how this situation has arisen, and considers whether the UK’s standpoint complies with Union law. It suggests that this issue should not be ignored in Brexit negotiations, as it concerns the rights and lives of many thousands of Europeans.

The obligation to have ‘comprehensive sickness insurance’

 The United Kingdom requires Union Citizens from other Member States who are not economically active to have comprehensive sickness insurance covering all costs before it will recognize that they are lawfully resident. They have an apparently convincing basis for this: the condition is lifted word-for-word from Article 7(1)(b) and 7(1)(c) of the Citizenship Directive.

 However, this policy has been in the news recently as a result of Brexit. Most migrants do not have such insurance. In practice they are permitted to enter the country and live or study, but if they ever apply for the status of permanent resident – granted after five years of residence in a host state on the basis of the directive – then they are refused, because years without insurance violate Article 7 and therefore do not count. After the Brexit vote there has been a rush of applications for permanent residence documents, as foreigners in the UK try to secure their future. With this has come a rush of refusals, for the reason above.

 How can this confusion have happened? The answer lies in a combination of a very messy piece of EU law, and a half-hearted approach to this from the UK which at its best might be called compromising, and at its worst sneaky – as will be explained below. The mix has led to an impossible legal situation for very many people, which we may hope is addressed in forthcoming Brexit negotiations – if the UK does not back down unilaterally before that stage is reached.

 Does comprehensive sickness insurance exist in the UK?

 The problem begins with the directive requirement itself. It is unproblematic in the majority of Member States which have insurance-based healthcare systems. The non-economic migrant must simply buy local insurance from one of the bodies or funds making up the national system, just as a national citizen would do. However, several Member States have national health systems, in which healthcare is provided by tax-funded institutions and no insurance is involved. In these states – including the UK – compliance with the requirement is apparently only possible if the migrant buys private commercial health insurance.

 However, that is easier said than done in some states, including the UK: there are plenty of private health insurance policies available, and some describe themselves as comprehensive, but none are: they invariably exclude numerous risks. This is not particularly surprising – the very existence of national health care systems is because risk pooling is the only way to generate health cover that is both comprehensive and affordable. Left to the market, the rich would have very expensive insurance, and others would have very limited insurance. Hence the most comprehensive insurance offered by Bupa, the best-known UK insurer, and a relatively well-respected non-profit-making organization, nevertheless excludes pre-existing conditions, AIDS care, dialysis, pregnancy care, and intensive care![1] It is a pale shadow of the average European national healthcare system, and it is clearly not what can have been meant by ‘comprehensive sickness insurance’.

 It is thus impossible for a migrant to comply with a literal reading of Article 7 in the UK. This was one of the elements of Baumbast, the only case where the issue has arisen before the Court of Justice, in which the UK tried to expel a German citizen because the insurance that he had did not cover all costs. Without going into the issue at all, the Court found that the UK approach was disproportionate, and now the UK accepts health insurance covering the ‘majority’ of costs, and says prominently in its brochures on the topic that a proportionate approach must be taken.[2]

 Nevertheless, only around ten percent of the UK population have any form of private health insurance, and it is an expensive matter. Many policies are extremely limited, but more substantial ones can easily cost several hundred euros a month. Is the current UK approach – requiring private insurance covering the majority of costs – compatible with EU law? The UK courts seem to think it is, but that will not be persuasive to many EU lawyers. In the light of the text and purpose of the directive, what would the Court of Justice say?

 What does the insurance obligation then mean?

 There are two visions of why the sickness insurance condition is in the directive. One is that host states should not incur medical costs as a result of non-economic migration. The sickness insurance clause is then an extension of the ‘sufficient resources’ requirement found in the same article. However, mere affiliation to a public insurance scheme does not prevent a migrant being a burden, since such schemes are invariably tax-subsidised, and do not exclude high risk individuals or those with pre-existing conditions. On the no-burden view of Article 7, private healthcare insurance should be compulsory in all states. I am not aware of any state with insurance-based healthcare that takes this approach. Such states simply require migrants to buy insurance on the same terms as nationals.

 The other vision of the condition is that it aims to ensure that non-economic migrants arrange their access to healthcare in the host state. The goal is to prevent migrants from simply moving to a state, and taking no action, with the result that healthcare providers may find themselves with a patient not backed by any means of payment, and all the financial and institutional complications that this may entail. It is an individual responsibility clause, rather than a zero-subsidy clause.

 On this reading, affiliation to the national health insurance system fulfils the requirements of Article 7: the migrant has thereby arranged their health cover. However, how should this be extrapolated to the UK? Arguably, the UK equivalent of affiliation to a national health insurance system is simply being resident – since that is what entitles a person to NHS care. This is less economically strange than may seem: the equivalent of paying an insurance fund in the UK is paying one’s taxes. Just as Member States with insurance-based systems can control the individual contribution by legislating to regulate premiums, Member States with national health systems can control that contribution by regulating their taxes. The migrant who relies on the NHS, and is subject to UK tax law, is in a comparable position to the migrant in another state who pays into the state sickness insurance scheme and thereby acquires comprehensive sickness insurance.

 Neither reading is wonderful. Article 7 is frankly an embarrassment to the EU legislator: someone there should surely have been aware that it apparently created a condition that was impossible to meet.

 However, the more literal reading that the UK government prefers has another problem: it may well mean that the article is void. For while there was no obligation on the EU to adopt legislation facilitating free movement for the economically inactive, there is certainly no competence to adopt legislation making such movement impossible. Even if we were prepared to find proportionality implicit, so that one might read Article 7 as requiring ‘moderately comprehensive sickness insurance’, that would be imposing a very significant financial burden. Given that private medical insurance is unequivocally a luxury product for the richest few percent, and given that non-economic migrants are permitted to live in other states as long as they have at least the ‘minimum social security pension’ it would seem paradoxical, not to say tasteless, to insist that they all purchase private medical insurance: it would require those on median or average incomes to buy a product aimed at the richest ten percent, one that is designed to be unaffordable for people like them.

 As well as this, those with pre-existing conditions for which they required treatment would essentially be excluded from migration if they were not allowed to use the NHS. It should probably be seen as a violation of the general principle of equality to construct legislation that excludes even the possibility – it is not just a question of money, the insurance does not exist on the market – of non-economic migration for those with chronic or ongoing illnesses, even though they may well be capable of study or normal life.

 Hence, despite its textual problems, there is something to be said for the view that as long as migrants comply with the other conditions for lawful residence, then this entitles them to NHS treatment –which under British law is for all lawful residents – and that is the UK equivalent of having comprehensive sickness insurance. This is the view that the Commission takes, and it began an enforcement action against the UK in 2012, which it then, perhaps for political reasons, seems not to have actively pursued. The Commission confirmed in November 2016 that the action was ongoing, but there have been no publicly visible steps taken.

 The UK and its strategically selective enforcement

 Although the British view of Article 7 is, on balance, not persuasive, it is not beyond argument. However, what is hard to defend is its particular procedural approach. Although the insurance obligation is mentioned in official documents, no steps are taken to enforce it in any way against new arrivals, who are able to participate in society and obtain NHS treatment without problem. Even more than that, the UK government has recently emphasized that it regards the insurance clause as a ‘technicality’, and will not try and expel anyone or treat them as unlawful because of it. It is only when migrant Union Citizens apply for permanent residence that the clause is used, to render their last five years worthless.

 This seems a profoundly dishonest approach. It looks very much as if the primary goal of the UK is not to ensure migrants have health insurance, but rather to ensure that they do not obtain permanent residence. It behaves as if they are complying with the requirements for lawful residence, and then only later claims that it took a different view all along. Surely this is inequitable? If it treats migrants as lawful in all respects, and even announces that it regards them as such, then it should not be allowed to later claim that they did not comply with the requirements for lawfulness.

 The UK is not without legal cunning. Hence maybe the UK would say that all those Union migrants without sickness insurance, but with sufficient resources, are being allowed to stay on the basis of national law – which means they are welcome to be there, but will not be acquiring EU rights. That however would be more persuasive if the UK legal regime was not so obviously an implementation of the directive, even to the extent of the importation of the word ‘proportionate’ from Baumbast. Rather, it appears that there is a strategically selective enforcement of the domestic rule, in order to minimize the chance that migrants will comply, and thereby acquire inconvenient rights.

 At any rate, while a judgment clearing up Article 7 would be welcome, there is little merit to the UK’s retrospective invalidation of the fairly blameless (and often costless – not all migrants get sick anyway) years of residence of many non-economic migrants. Given that the position of UK citizens residing on the mainland of Europe and Union Citizens residing in the UK is certainly going to be a part of the Brexit negotiations, perhaps Mr Barnier (the Commission’s chief negotiator) and his team should also consider this aspect. Undoubtedly those who have lived in a host state for many years deserve special protection post-Brexit, and the position of those with directive-based permanent residence rights may well be addressed. It would then be very welcome if the UK was required to concede that this group is not confined to those who have had five years of private medical insurance. Once the UK has sorted out its enormous bureaucratic mess here – and the 85 page form that migrants have to fill in to get permanent residence is another issue that should be addressed – and stopped using procedure as a way to deny substantive rights, perhaps a sensible negotiation can finally begin. Otherwise there is a serious risk that a good arrangement will be made for all those who are long-term residents of the UK, but the UK government will make sure that very few people are recognized as falling into this group.

[1] Among other exclusions. See p23 of the terms and conditions

[2] See page 30


  1. Helier

    Interesting analysis and this raises a number of questions. Isn’t it possible for EU migrants to have NHS healthcare paid for by their country of origin through a reciprocal arrangement (like the British pensioners in Spain) or by using the EHIC card? Isn’t this situation partly due to the fact that the NHS doesn’t claim back costs from migrants? In the French system for example, if you don’t have social security you have to pay everything. Couldn’t there then be some sort of NHS card to make this clearer? How can the French sickness insurance be described as “comprehensive” when it only covers 70 per cent of doctors’ bills and one has to pay for a private top-up scheme? In any event, we’re talking about the pre-Brexit situation in the UK – when Parliament finally decide on the post-Brexit immigration law it will no doubt be worse, as the UK won’t be bound by EU law at all. On the continent, by contrast, there is a 5-year permanent residence system for third-country nationals already under EU law, so while there is some certainty already for Brits in the EU there is absolutely no certainty for EU migrants in the UK because we have no idea what the new law will be (hence the importance of enshrining an assurance in the withdrawal act …)

    • cochineal

      Very interesting article, with a spot-on conclusion. It does fail to clearly point out that the CSI requirement is not for workers or self-employed EEA migrants, but catches out students and those who have been self-sufficient (not just the super-wealthy, but mainly stay-at-home parents relying on their partner’s income, carers, etc.). Because of the latter category it is also inherently discriminatory against women, as they are more often the stay-at-home parent. The other blatant unfairness is that for students the policy was never enforced until 2011, when it suddenly was enforced with retro-active effect. As far as I know no UK university has ever told their EEA students anything about requiring CSI.

      As to the previous comment: Solutions for the future are irrelevant (isn’t it possible…etc): the CSI problem is a real one for many EEA citizens currently living in the UK who were never made aware of this requirement and cannot retroactively comply, meaning their previous years here suddenly don’t actually count for anything. How it may be arranged in the future post-Brexit doesn’t help them obtain residency, and any post-Brexit migrants will/should be aware of any new rules when they enter the country and thus at least in theory be able to comply with them. It is the fact that many current long-term residents are simply caught out now that is so unfair.

      Also the comment about the flip side that there is “a 5-year permanent residence system for third-country nationals already under EU law” which would give some certainty already for Brits in the EU will not work once these Brits are no longer EU… they would only benefit under these rules post-Brexit if they have a qualifying EEA family member, in all other cases they would probably fall under the individual states’ national laws. Their lives are also uncertain. The only massive advantage they have over EEA citizens living in the UK is that at the moment it will be much easier for them to obtain PR in the respective EEA country then it is for their counterparts here in the UK who are confronted with the lack of CSI – this is a very specific UK issue.

    • Chiara

      Indeed the options to fulfil the requirements for having Comprehensive Sickness Insurance include being an EHIC holder from another EU country. However, by registering with a GP people become UK residents, so if they apply for an EHIC card, this is issued by the UK. Which I think it’s a paradox, because in order to be covered by Health Insurance from your country of origin, then you must be not resident here, which I guess invalidates some other requirements to apply for Permanent Residence…

  2. Labespierre

    Thank you for raising this issue. I am an EU national that fell precisely into this trap. When my country-of-origin insurance ran out, I got myself a NHS health card- only to learn when applying for residence that I needed a card not issued by the NHS.

    I’ve lived here for over 8 years and I don’t qualify for residence. The home office treated me with suspicion, provided me false information on the phone and makes it impossible to contact your caseworker directly. I lost a lot of money and time, and now I can only wait and hope that the deal that the UK strikes with my country of origin will be favourable. I am not holding my breath.

  3. Steve Greeb

    It is indeed a thorny problem. Several points come to mind. besides the sneaky, and that is the right word, way the UK is now using the Directive.

    Why only the emphasis on the 5 year permanent residence? When Brexit days comes there will be hundreds of thousands of transnationals who will still be in the process of reaching the 5 years. Presumably if Brexit day is March/April 2019 those who took up a new country of residence from April 2014 onwards. Are they to be deported?

    There is an additional knock on problem for British migrants in Spain (at least). Residence here for the non economically active requires proof of income, normally no problem, and proof of health cover. For UK state pensioners the UK covers this by issuing the S1 form, thereby entering the migrant into the Spanish health system. The UK then pays a flat rate to the Spanish health service.

    The EHIC card is only for short term visits and not for residents.

    If the UK withdraws the S1 then hundreds of thousands of British pensioners in Spain will either be forced to take out private insurance which as noted in the article is not comprehensive and is beyond the reach of many or to return to the UK. A forced deportation.

  4. Ban Nadi

    What about the fact that having private medical insurance does not help the NHS in the least? Everyone is registered with the NHS, it is almost mandatory – the first thing you are asked for if you are a student – and your NHS doctor will refer you to do your tests and treatment on the NHS, private insurance or not. So the requirement to purchase medical insurance may help the bottom line of an insurance company, but won’t protect the public funds – if that was ever the objective of the architects of this requirement…

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