Op-Ed: “Comprehensive Sickness Insurance – some clarity from A (Soins de santé publics)?” by Mary Guy
On 15 July 2021, the Court of Justice handed down its judgment in A (Soins de santé publics) (C-535/19), confirming the right of economically inactive EU citizens who have exercised their free movement rights to be affiliated to the public sickness insurance system of the host Member State. An important caveat to this decision is that EU law does not require that affiliation to be ‘free of charge’.
It is well-known that in order to obtain a right of residence for more than three months, persons who are neither employed nor self-employed are required to have comprehensive sickness insurance (CSI). This forms the second – cumulative – condition, in addition to having sufficient resources not to become a burden on the social assistance system, under Article 7(1)(b) of Citizens’ Directive 2004/38. Where this first condition has received close examination in a range of cases, including Brey (C-140/12) and Dano (C-333/13), the second requirement for CSI appeared to have received less attention.
The logic of requiring economically inactive EU citizens to have CSI appears a clear extension of the sufficient-means requirement. What has perhaps been less clear is the connection between this requirement for CSI and affiliation to national healthcare systems with regard to obtaining residency rights. That it can be possible to be affiliated to a national healthcare system (for example, by paying consumption taxes) and potentially not have CSI cover can be demonstrated by the experience of EU citizens in the UK. This particular discrepancy was further highlighted as recently as October 2020 by the Commission’s consideration in a letter of formal notice that ‘EU citizens who are affiliated with the UK public healthcare system (NHS) and are entitled to get medical treatment provided by the NHS are not considered as having sufficient sickness insurance’.
The seemingly converse situation – of an EU national obtaining CSI but being denied affiliation to a host Member State public healthcare system – was at issue in the present case, drawing together readings of Article 7(1)(b) and Article 24 of Citizens’ Directive 2004/38, and Article 3(1), Article 4 and Article 11(3)(e) of Social Security Coordination Regulation 883/2004.
By way of background, A, an Italian national, relocated to Latvia in January 2016 to join his Latvian spouse and their infant children of Latvian and Italian nationality. This move meant that A was entered in the register of Italian nationals living abroad, which entailed losing eligibility to Italian healthcare. A’s application to the Latvian National Health Service to become affiliated to the Latvian social security system was refused.
The refusal was confirmed by a decision of the Latvian Ministry of Health: A was neither employed nor self-employed, and was staying in Latvia on an EU citizen’s registration certificate, so could only receive healthcare benefits in return for payment under Article 17(5) of the Latvian Law on Medical Care. A’s attempts to challenge the decision were dismissed at first instance by the District Administrative Court and on appeal by the Regional Administrative Court, by considering, in essence, that different treatment of A and an economically inactive Latvian national could be justified by a legitimate objective of protecting the public finances, which was proportionate.
The Latvian Supreme Court, hearing A’s appeal, sought clarification of the compatibility of the affiliation-refusal with EU law regarding citizenship and social security.
The first question related to the applicability of the Social Security Coordination Regulation to the provision of medical care. Here the Court clarified that state-financed benefits granted without individual and discretionary assessment of personal needs to categories of recipients defined by national legislation constitute ‘sickness benefits’ within Article 3(1)(a), so were not excluded from the ambit of the Regulation as ‘social and medical assistance’ under Article 3(5)(a).
The Court reformulated the four remaining questions as meaning that clarification was sought regarding whether Article 4 and Article 11(3)(e) of the Regulation and Article 7(1)(b) and Article 24 of the Directive must be interpreted as precluding national legislation which excludes economically inactive EU citizens from the right to be affiliated to the public sickness insurance system of the host Member State.
Advocate General Saugmandsgaard Øe had rightly taken the view that systematic refusal to allow economically inactive nationals of other Member States to receive public healthcare benefits on the same conditions as nationals before they have acquired a permanent right of residence is contrary to the objective of freedom of movement, and to the very concept of ‘citizenship of the Union’. (Opinion of Saugmandsgaard Øe in C-535/19, point 80). This provided a departure from considerations raised by both the Latvian Government and the Commission. The conflict provisions of the Regulation led the Court to conclude that a Member State cannot, under its national legislation, refuse to affiliate to its public sickness insurance scheme an EU citizen who comes under its legislation (point 50).
Both the Advocate General and the Court of Justice were mindful of the sensitive issue of scope for economically inactive EU citizens (and their families) to become an unreasonable burden on the public finances of the host Member State pending permanent residence. Advocate General Saugmandsgaard Øe appeared to emphasise A’s strong integration with regard to family reunification, but also suggest that whether an economically inactive EU citizen constituted an ‘unreasonable burden’ should be determined at Member State level (Opinion of Saugmandsgaard Øe in C-535/19, points 102, 144-145).
A seemingly clear solution to the issue of ‘unreasonable burden’ appears to be for the economically inactive EU citizen to bear the cost of CSI pending permanent residence, at which point their access to the host healthcare system changes. The Advocate General had not been unwelcoming of this idea. Furthermore, the Court clarified that the requirement for having CSI under Article 7(1)(b) would be rendered redundant if the host Member State were required to grant affiliation free of charge to its public sickness insurance system to an economically inactive EU citizen residing in its territory (point 56).
The judgment in A (Soins de santé publics) appears on the face of it to offer a certain degree of clarity: economically inactive EU citizens such as A, with a right of residence under Article 7(1)(b) of the Directive, cannot be denied affiliation to the public healthcare system of their host Member State, but may need to pay for this affiliation. This finding appears to be robust regardless of healthcare system type, thus avoiding scope for the anomaly of taxation-funded systems which may allow for a distinction between healthcare system-access and a requirement for CSI, as indicated by the Commission’s aforementioned challenge to the UK for failing to transpose Article 7(1)(b), and the move away from the taxation-funded model in Latvia towards compulsory health insurance which developed since 2018 (Case C-535/19, Summary of the request for a preliminary ruling, point 34). Furthermore, the judgment also offers insights relevant for students exercising free movement rights under Article 7(1)(c) of the Directive 2004/38 which also includes the requirement to obtain CSI. In addition, the judgment would seem to offer insights for future cases regarding CSI, such as Commissioners for Her Majesty’s Revenue and Customs (Assurance maladie complète), C-247/20.
Questions arguably arise more with the clarification that Member States are free to charge for affiliation to their public sickness insurance schemes in order to prevent economically inactive EU citizens becoming a burden on the public finances of the host Member State. Advocate General Saugmandsgaard Øe’s comments on what constitutes an ‘unreasonable burden’ would appear to highlight some of the issues which will need to be considered, as well as examining individual cases. The AG’s comments might be understood as distinguishing A’s situation of family reunification from cases which might be classed as ‘benefit tourism’. Such considerations suggest that challenges to the free movement objective and the concept of ‘citizenship of the Union’ may be refocused, rather than resolved by A (Soins de santé publics). A Member State’s determination of an ‘unreasonable burden’ threshold, taken together with the wider national competence regarding health policy and healthcare system organisation of Article 168(7) TFEU and the diversity of healthcare systems across the EU all indicate scope for complication in interpreting and implementing this judgment.
It may be considered that there are some common features: a majority of EU healthcare systems revolve around publicly-funded healthcare, and an increasing number are based on insurance, not taxation. However, insofar as charging for affiliation to public healthcare systems may generate markets of substitutive health insurance, with scope for overlap between this and supplementary health insurance, other areas of EU law may also be engaged as a consequence of this case.
Mary Guy is Lecturer in Law at Lancaster University (UK), founder of the Health in Europe virtual discussion forum, and co-coordinator of the EU Health Governance research network. She is the author of ‘Competition Policy in Healthcare – Frontiers in Insurance-Based and Taxation-Funded Systems’, Intersentia, 2019.