Proposals from the European Commission would guarantee that the cost of treatment elsewhere in the EU is reimbursed by the patient's own national health scheme back home.
The plan follows years of legal cases in which European court judges have ruled that freedom to cross EU borders for treatment should be a right for all.
Today's draft law states that, as long as a treatment is covered under the patient's national healthcare system, he or she can opt to receive the treatment in another EU country and be reimbursed "without prior authorisation".
Patients would have to pay the medical costs up front, but will be assured of repayment up to the level of cost of the same or similar treatment under their domestic national health system.
The Department of Health reacted cautiously this afternoon, pointing out that the proposal was just a draft Directive and would be "subject to change" during negotiations on the issue between EU health ministers.
Any finally agreed Directive would have to be acceptable to the UK and protect the NHS.
A Department of Health spokesman went on: "The Government is clear that health tourism will not be funded by the NHS. We are also absolutely committed to ensuring that, where UK patients choose to travel abroad for care, the NHS retains the ability to decide what care it will fund. Equally, anyone from other member states travelling to the UK specifically for healthcare will have to pay the full NHS cost of treatment upfront.
"The priority for the vast majority of NHS patients is high quality healthcare received close to their homes, and we remain committed to providing this.
"Currently, where patients do choose to travel abroad for care, overwhelmingly this tends to be for care the NHS would not have funded anyway, for example, cosmetic surgery.
"Case law exists already from the European Court of Justice allowing patients who wish to receive care abroad to do so. But very few people choose to do this, and there has been no significant recent increase in numbers in recent years."
One of the EU legal cases which prompted the Commission to propose new laws was that NHS patient Yvonne Watts, who two years ago won a landmark ruling that the NHS should reimburse her for the cost of a hip replacement she opted to have in France to avoid long delays at home.
The NHS had argued that Ms Watts had not received clearance to seek treatment abroad and therefore should not be reimbursed - but under the latest plan no authorisation would be required in most cases.
To encourage people to take up the new rights, the Commission emphasised today that healthcare quality and standards abroad would be guaranteed in the same way as for domestic patients.
And, in the event of problems, patients would be guaranteed redress and compensation, helped by national contact points for cross-border healthcare.
European Health Commissioner Androulla Vassilliou commented: "This proposals aims to clarify how patients can exercise their rights to cross-border health care, while at the same time providing legal certainty for member states and health care providers.
"It ensures that the quality and safety of health care will be guaranteed throughout the Union, and promotes cooperation between health systems to provide better access to specialised care."
Liz Lynne, West Midlands Liberal Democrat MEP Liz Lynne said: "Sadly, NHS hospitals have a higher incidence of super bugs and poorer survival rates for many conditions, including some cancers, than other EU member states, so is it no wonder an increasing number of people are going abroad for treatment.
"Any proposal which offers more choice to patients and adds clarity to existing laws should be welcomed, but these proposals would not be necessary if the UK had learnt healthcare lessons from other EU member states.
"In many countries such as the Netherlands, Sweden and Denmark, the MRSA infection rate is less than 1%, ten times lower than in the UK and yet, unbelievably, exchange of best practice is practically non-existent."
But she said it was crucial that the NHS was not financially damaged by any new health measures: "Clearly, a balance needs to be struck as the NHS is not in a position to pay for more expensive treatment abroad on demand, but if a clinician advises treatment and this cannot be provided at home, then the NHS will have to cough up."
The General Medical Council said the plan potentially represented "a significant change in access to and delivery of healthcare across Europe."
The GMC said the Commission had to recognise that patients not only had the right to receive healthcare anywhere in the EU, but an equal right to be confident that they will be treated by safe doctors who are properly regulated.
A GMC statement went on: "Whereas patient mobility is an emerging market, there is already significant mobility of doctors across Europe.
"The GMC calls on the Commission to work with European healthcare regulators to enable the free-movement of doctors whilst at the same time ensuring the safety of patients and the public."
The GMC said any new law should include a legal duty on regulators across Europe to exchange information about doctors and to enable them to test the language competence of medical graduates and monitor their competence.
And the Council called for "robust mechanisms across Europe to ensure patient safety - whether it is the patient or the doctor moving."
Dr Peter Carter, chief executive and general secretary of the Royal College of Nursing, gave a "cautious welcome" to the directive, which he said "clarifies the rights and responsibilities of patients seeking care in other EU member states".
But he added: "This new directive will only work if the EU puts in place information systems that make patients aware of their care entitlement abroad and the quality of the care available. This should allow those considering treatment in other parts of the European Union to make an informed choice.
"The EU needs to ensure that equity is central to any further developments in cross-border care. We would be very concerned if patients who clearly required hospital treatment were expected to pay upfront for healthcare in another European country.
"At the same time, as more people want care closer to home, we need safeguards to ensure the directive doesn't interfere with local health service planning."
Neil O'Brien, director of eurosceptic thinktank OpenEurope, said: "There are some big problems with this directive which could lead to unfair queue-jumping by the well-off.
"The directive also allows the EU to start regulating many other aspects of the way we run healthcare in Britain, from medical standards to prescriptions. It is no exaggeration to say that in a few years time we might end up with a European Health Service rather than a National Health Service.
"The Government is pretending this directive is no big deal, but it will mark the end of the way we have run healthcare in Britain since the Second World War. Some will see the beginning of the end of the NHS as a good thing, and others will disagree, but either way it is a hugely significant moment."
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