The Coalition has accused the Labor government of imposing a “sneaky” new tax on older Australians by reducing the private health insurance rebate for people aged over 65. Critics say the change will increase premiums for pensioners and self-funded retirees, potentially prompting some to drop private cover and adding pressure to public hospitals; Labor’s broader policy is intended to redirect funding towards aged care.

The change was included in the 2026–27 budget and is expected to affect more than three million older Australians. Opponents claim many people will pay hundreds of dollars more each year, with some couples facing increases above $1,000, while the government argues that all savings from the revised rebate will support aged-care services.