So what was the IHS surcharge for? I'm sure someone mentioned to me that they get free healthcare for a year?
No, the IHS surcharge is a £200 per year contribution towards her healthcare. If she gets a job, she will also be paying taxes towards her healthcare as well.
It does not mean everything is free.
Everyone has to pay for prescriptions in England, unless they are exempt due to age, certain medical conditions, pregnancy, being prescribed birth control etc. (which will be covered by the boxes on the back).
However, instead of paying the full cost of the medication (which could potentially be hundreds or thousands of pounds), you pay a subsidised fee of £8.60 per item on the prescription... it's the same price regardless of what medication is on it, or how many months of medication you get. In some cases, the mediation is available over the counter to buy (such as cetirizine), so it might be cheaper for her to actually buy it instead of filling the prescription - the pharmacist will usually advise if this is the case.
The prescription fee goes up in April every year - in 2016/2017 it was £8.40 and in 2017/2018 it is £8.60. This only applies to England though, as Wales and Scotland have scrapped the prescription charges for people living in those countries.