The assistant treasurer, Josh Frydenberg, has flagged big changes to the government’s proposed GP co-payment plan after consultation with health professionals on the issue.

The ABC has reported that the plan has been dropped entirely.

The health minister, Sussan Ley, has been consulting with doctors and health groups over plans for a $5 co-payment, which would be charged by GPs for all non-concessional patients.

The ABC says Ley recently told a small group of backbenchers the $5 payment plan would be scrapped, but the government will freeze the indexation of the Medicare rebate.

Health groups say the government remains set on bringing in the co-payment, despite public and backbench MP concern.

Speaking on Saturday, Frydenberg said there would be “significant changes to our previous approach on the Medicare co-payment”.

“That is the result of Sussan Ley’s extensive consultation with the sector,” Frydenberg told Sky News.

“The prime minister has made it very clear that we won’t be pressing ahead with significant reform in that space without industry-wide consultation.”

The prime minister, Tony Abbott, who’s in New Zealand for talks with this counterpart John Key, said he was intent on protecting Medicare.

“It is a great system, a great system that I know and love,” Abbott told reporters. “We are consulting with the medical profession. Those consultations are continuing, but at some point in time I’d certainly expect to have more to say.”

The government wants the $5 co-payment levied on GP visits, after having initially flagged a $7 payment.

The oppositon’s health spokeswoman, Catherine King, said if Abbott scrapped the co-payment altogether, it would be a desperate measure to save his job and not due to concern for Medicare.

“Tony Abbott is only coming to the party very late,” King told reporters on Saturday. “If he dumps his GP tax, that will be a good thing. But people will remember he will be dumping it because he wants to save his job.

“This isn’t about the government consulting, it isn’t about the government caring about Medicare, caring about our health care system and caring about patients.”