The Federal Government is planning to dump its GP co-payment plan.

The ABC understands Health Minister Sussan Ley recently told a small group of backbenchers the $5 payment would be scrapped.

Government sources have confirmed it will go.

However, it is likely the Government will go ahead with its plan to freeze the indexation of the Medicare rebate to send a so-called "value signal" over time.

It is understood the Government believes the freeze will eventually erode the amount of money doctors collect through the rebate and encourage them to pass on the cost to patients.

Speaking in New Zealand earlier, the Prime Minister gave a strong indication the policy would go.

"I don't want to pre-empt our party decision making processes, our government decision-making process, but it's no secret that we have been rethinking some policies that were brought down last year," he said.

"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 Opposition's health spokeswoman Catherine King said the policy change was not about patients.

"This is about Tony Abbott trying to save his job, he doesn't care about what's happening to patients across the country," she said.

Under the Government's original budget plan, bulk-billed patients would be charged $7 to see a doctor with proceeds put into a new medical research fund.

But in December the policy was unable to pass through the Senate and was dumped in favour of a $5 payment charged at doctors' discretion.

A proposed $20 cut to the rebate for consultations under 10 minutes was also due to come into effect earlier in the year, but was "taken off the table" in the face of a sustained campaign by doctors and the Government's political opponents.

The ABC confirmed Treasurer Joe Hockey and the health minister at the time, Peter Dutton, were opposed to the rebate cut when it was first announced in December as part of the Government's revised GP co-payment policy, but were overruled by Mr Abbott.