More than 3 million Australians aged over 65 will have to pay hundreds of dollars more for their private health insurance per year, in a move the federal government argues will re-establish fairness between generations.

In a major pre-budget speech at the National Press Club on Wednesday, Health Minister Mark Butler announced sweeping changes to the National Disability Insurance Scheme and aged care.

As part of this, he revealed older Australians would no longer be given special treatment and would now have to pay the same amount for health insurance as younger Australians.

“I understand this won’t be a welcome decision for many, but it’s the right thing to do,”

Mr Butler said the current policy was “not fair between generations” and not the best use of taxpayer money, with the decision set to save the government $3 billion over four years, which will be spent on aged care elsewhere.

The government said about 3.2 million older people would now have to pay, on average, between $226 and $255 more a year, with 44,000 older Australians expected to ditch their private health insurance as a result.

Shadow Aged Care Minister Anne Ruston said the government was “targeting” older Australians who were already struggling to hang onto their private health insurance during a cost-of-living crisis.

“They’re going into a time where they’re scrimping and saving to keep their private health insurance because they know, in the later years of their life, they’re more likely to draw on the health system,” she said.

“And these are the people the government is targeting to pay for the mess that they’ve made of the aged care system.”

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