The federal government announced on Tuesday it had ditched plans for a mandatory $7 GP co-payment, instead introducing an optional $5 payment to be charged at the discretion of doctors to make up for a reduction in the rebate they will receive from Medicare.

Pensioners and other concession card holders, children under 16 and those living in aged-care facilities will be exempt from the charge.

Member for Throsby and opposition assistant health spokesman Stephen Jones said instead of just "carving out" certain sectors of the community, the whole proposal needed to be dumped.

Mr Jones welcomed the fact people with concessions wouldn't be hit by the tax, but said it was "something everyone should benefit from".

"Nobody should have to pay this rotten tax," Mr Jones said.

He said the government shouldn't expect Labor to "slap them on the back" for going against its word.

"We won't be supporting it, we won't be voting for it; this is a broken promise," he said.

"Make no mistake about it, this reworked GP tax is going to do exactly what it's designed to do - that's stop people going to the doctor when they need to. Worse than that, it's going to threaten the economic viability of many GP practices, particularly in regional Australia.

"What the government is proposing to do is to get the doctors to do their own dirty work; they're asking doctors to do what Parliament has refused."

Member for Cunningham Sharon Bird said people across the region had sent a clear message to Tony Abbott and Health Minister Peter Dutton they didn't want Medicare to stop being a universal healthcare system.

"This is just another dodgied-up Band-Aid, trying to pretend that they've listened to people when they haven't," Ms Bird said.

"I think people across our region are going to absolutely reject this as a sneaky back-door attempt to try and do what they ... couldn't win the argument on publicly or in the Parliament."

Mr Abbott denied the new policy was a backflip, but said it was a sign of an effective Senate. He said the new "modest" charge would ensure Medicare flourished in the future. 

The Illawarra-Shoalhaven Medicare Local has warned some GPs will have no choice but to pass on the federal government’s revised co-payment.

The organisation says the move could also see patients bypass the practices all together and later require hospital treatment.

Illawarra-Shoalhaven Medicare Local general manager of corporate services Ron De Jongh said the changes announced by Prime Minister Tony Abbott on Tuesday had the ‘‘potential of making the GP look like the bad person’’.

However, Mr De Jongh said the policy was better for a large part of the population when compared with the previous version.

‘‘But, it is still a policy that reduces the spend on primary healthcare substantially and... somebody will need to compensate for that and that might well be, in many instances, patients,’’ Mr De Jongh said. 

Although people with concession cards were exempt from the charge, Mr De Jongh said the government was insisting on reducing the Medical Benefits Scheme (MBS) rebate for those who didn’t.

‘‘The practice will need to decide if it can afford to absorb that,’’ he said.

‘‘Our guess is that, given the fact the MBS items haven’t kept pace with inflation now for years, practices won’t be able to absorb it and will have to pass it on. 

‘‘For some people that will be a price differential that will stop them going to the GP in cases when they should have gone and ...they might end up in the emergency department.’’

- ANDREW PEARSON