The Australian government has confirmed a budget measure that will increase private health insurance costs for more than 3 million Australians aged 65 and over. The change, announced as part of the 2025-26 federal budget, involves removing the age-based private health insurance rebate tiers for people aged 65 and above.
Currently, Australians aged 65-69 receive a higher rebate than those under 65, and those aged 70 and over receive the highest rebate. The new policy will consolidate these into a single tier for all adults under 71, aligning with the aged pension eligibility age. The government estimates this will affect approximately 3.1 million people.
Treasurer Jim Chalmers has argued the reform is necessary to improve the sustainability of the health system and ensure fairness across generations, stating the savings will be redirected to fund other health initiatives. The measure is projected to save the federal budget $1.1 billion over four years.
Consumer advocacy groups and the opposition have criticized the move, warning it will place significant financial pressure on older Australians, potentially leading some to downgrade or drop their private hospital cover altogether.
