Following the government officially launching the new GHIC earlier this week as a result of the UK reaching a trade deal with the European Union, how does the insurance industry feel about its impact on cover? Insurance Times finds out

The Global Health Insurance Card (GHIC) has replaced the European Health Insurance Card (EHIC); it will be applicable for all customers travelling within the European Union (EU).

It ensures that UK tourists pay the same price for their treatment at a hospital as a local resident in the European Union (EU), but it is no substitution for insurance. 

A Biba spokesperson told Insurance Times: “We welcome the new GHIC, but travel insurance covers so many other areas including liability, cancellation and curtailment, missed departure, baggage etc.

“Both the EHIC and GHIC are limited in [terms of] the compensation available and do not apply if you are taken to a private hospital.”

The trade body strongly recommended that any UK traveller speak to a Biba broker, while stressing that the GHIC - like the EHIC - is not a substitute for travel insurance.

The UK reached a Brexit trade deal on Christmas Eve last year, with the transition period completing on 1 January 2021. As a result, the government officially launched the new GHIC earlier this week. But how does the insurance industry feel about its impact on cover? 

Remaining competitive

In January, The Independent reported that the NHS was overwhelmed by applications for GHIC at a time when the healthcare system is being stretched to full capacity yet again, as Covid-19 cases soar with the new variant.

Meanwhile, Anthony Kaye, chairman of the Association of Travel Insurance Intermediaries, said the professional body had not been made aware of any “adverse impact” on insurers resulting from the surge in GHIC applications.

He suspects this is partly due to all international travel currently being banned, unless for legally permitted reasons such as essential business travel.

“It may be too early to tell if members of the public are having to temporarily rely on travel insurance instead of a reciprocal health agreement,” he added.

But Kaye believes that the new GHIC is good news for consumers, “as it will help ensure premiums remain competitive for travel within Europe and has the potential to extend its scope to certain long-haul destinations too”.

What’s in a name?

Kaye is curious as to why the government has continued to include the word ’insurance’ within the GHIC’s name “when it is not an insurance policy in any sense of the word”.

He continued: “The GHIC is not a product or service authorised or regulated by the FCA. The concern being the GHIC could inadvertently, due to poor choice of nomenclature by government, be considered a substitute for a travel insurance policy, resulting in members of the public travelling uninsured.”

The ABI agreed that the GHIC is ”not an alternative to having travel insurance”.

A spokesperson for the ABI explained: “While any successor arrangements to the EHIC will be welcome, they will not be an alternative to having travel insurance.

“Whether travelling to the European Union or beyond, having travel insurance remains essential to give full cover against any emergency medical treatment costs, including any emergency return to the UK for medical reasons.”

Is it really global?

But, like its name suggests, is the card really global?

Fiona Macrae, head of consumer awareness initiative at Travel Insurance Explained, said: “The government are yet to confirm whether the GHIC will extend to the reciprocal agreement which is in place with countries such as Australia, New Zealand, Gibraltar and the Caribbean.

”Although one thing we can be certain of is that it will not be ‘carte blanche’ global cover where we have reciprocal healthcare arrangements with all countries around the world.”

There is fundamentally no “real change” for insurers, except for the GHIC not being valid in Iceland, Liechtenstein, Norway and Switzerland – these territories were previously covered by the EHIC.

Macrae continued: “In principle, hospitals should act as they did before and accept either the EHIC, the GHIC or a provisional replacement certificate (PRC).

“However, travel insurance providers will have no control over what hospitals may decide to do. Some hospitals may ask the patient to pay and then claim back from the Department of Work and Pensions in the UK.

“We are not aware if this has happened, but there is a possibility that it may occur until everybody is aware of the new situation.”

Not reliant

Like Biba and the ABI, Macrae stressed that the GHIC “does not negate the need for a travel insurance policy”.

Garry Nelson, marketing manager at AllClear, also recommended that customers are not reliant on the EHIC or GHIC.

Post-Covid-19, Nelson said there might be more customers that buy travel insurance as added protection should the worst happen, especially with the uncertainty of the pandemic still ongoing and travel corridors changing.

For example there are a number of additional factors that holidaymakers or travellers might have to consider moving forward, such as repatriation, contracting the virus while abroad as well as overnight changes to travel information.