Attempts will be made by EU health ministers early next year to draw up guidelines on patient mobility across member-states.
Achieving consensus on the issue will be difficult, according to the Minister for Health, Mr Martin, but he said the issue was one of the key items on the health ministers' agenda during the Irish presidency of the Union.
The move follows various European Court rulings on who should foot the bill when a patient from one member-state obtains treatment in another jurisdiction.
In 2001 the court ruled that patients could opt to be treated in another member-state if their own country could not provide the treatment within a reasonable period.
"The Spanish have advanced this because they are playing host every year to thousands and thousands of other Europeans, mainly Britons, who are all retiring to Spain, and it is now beginning to place a huge burden on the Spanish health system," Mr Martin said.
"It's a very key issue for all health systems. It's fair to say most health ministers want to advance, but in the context of protecting their domestic health systems, so you don't have a haemorrhage of funding out of your domestic health system in an unplanned unco-ordinated way which then starves your own domestic health system of resources.
"That would be a key concern of ours," he added.
"There is a need for European health ministers to agree a position on this.
"The agenda now is to frame a potential agreement, or guidelines or directives, around the European Court decision.
"I would obviously want to be protective of our own health system.
"On the other hand, one can't ignore the momentum towards the internal market. I would take a balanced view about it and I wouldn't panic about it.
"I think there could be some merit in some aspects of it. It could be good for the consumer but, while it would bring benefits to individual consumers, we have to guard against a potential undermining of our own health infrastructure," he said.