The Home Office is considering plans which could see illegal immigrants and failed asylum seekers being blocked from all but emergency health services.
A Home Office and Department of Health review examining proposals to restrict free access to GP surgeries for asylum seekers whose claims have been rejected is due to be published in the New Year.
And the Home Office has admitted that it is reviewing "the rules governing access to the NHS by foreign nationals", but said that so far no definite proposals had been put forward.
Critics believe the move could increase community tensions by placing even more pressure on accident and emergency departments.
At the moment everyone in the UK qualifies for free primary healthcare services - such as access to GPs.
But asylum seekers were barred in 2004 from accessing free secondary health services, such as treatment in hospitals for HIV.
According to The Observer, the Institute for Public Policy Research (IPPR) think-tank estimates there are up to 390,000 failed asylum seekers in the UK who are either unwilling or unable to return to their home countries and who would lose access to free healthcare provision if the government approves the plan.
Jill Rutter, senior research fellow at the IPPR, told the newspaper: "This will increase community tensions. What signals are going to be sent out if queues of asylum seekers are waiting at A&E departments because they can't register with a GP?"
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