Paying for the NHS: explaining the latest announcement on charging migrants

"The Department of Health said on Monday that the charges could save the health service up to £500m a year and would prevent "abuse" of the system by visitors and migrants." — The Guardian, 14th July 2014

Plans to charge some migrants from outside of Europe an extra 50% on top of the cost of their NHS treatments were announced by the Health Secretary yesterday. The Guardian reported that the new charges would bring in £500 million per year according to government estimates. But that's not quite right; the £500 million estimate applies to a range of measures to recover money from migrants treated by the NHS.

£100 million of it is expected to be recovered from migrants from outside the European Economic Area (EEA) following treatment, but it's not clear how much of this will come from the rise in fees and how much from improved processes for identifying them and recouping the money they owe.

And not all of the money is new - the government estimates that £47 million was recovered from this group in 2013/14.

£500m a year - how the figure breaks down

How a migrant is charged will depend on where they're from, and in the case of those from outside of the EEA, on the terms of their visas.

The government is estimating that, by 2017/18 it will annually recover:

• £200 million from EEA migrants who are not 'ordinarily resident' in the UK
• £200 million via a 'health surcharge' for non-EEA migrants with a visa to stay for over six months
• £100 million from charging non-EEA migrants with visas for under six months 150% of the cost of their treatment

Migrants who are 'ordinarily resident' in the UK - meaning they are lawfully settled here - are entitled to the same NHS services as other residents. No money is recovered for their care.

Those planning to stay in the UK for more than six months will have to pay an upfront "healthcare surcharge" on top of their visa application fee. This will give them the same access to the NHS as an ordinary resident. The charge for students will be £150 for every year they're given leave to stay in the UK, while everyone else will pay £200 per year. There'll be some exemptions such as for asylum seekers. Overall, the government estimates it will raise £200 million a year from the surcharge.

Those on shorter-stay visas are supposed to settle the cost of their own healthcare. At the moment, a care provider won't be reimbursed by local commissioners for providing care to this group of patients. The government's own analysis says this means providers currently have no incentive to identify the patients, as doing so means they have to pay for the collection of the money themselves, and in many cases will be unsuccessful.

Under the new system, providers will be paid 75% of the cost by commissioners, and then be able to charge 150% of it to the patient in fees. So if treating a patient has cost £100, the provider will get £75 from the commissioning group and then will try to recoup £150 from the patient or their insurer. If successful, they'll pay the £75 back to the commissioning group.

The government expects this will improve the rate at which care providers identify patients who are ineligible for free treatment, and therefore the amount of money the NHS recovers from them. Taken together, the new fees to the patients and efforts to recover cash from them will bring in an estimated £100 million a year by 2017/18. That's £53 million more than collected in 2013/14 under the current system.

A further £200 million is expected to be raised from similar improvements to the way providers identify non-resident migrants from the EEA, £150 million more than in 2013/14. The 150% fee won't apply here.