All Australians will now have an electronic health record as part of a new e-health system, and people will have to opt out if they do not want to take part.

The previous arrangement, commissioned in 2012, was an "opt in" system where patients could choose to join, but it was plagued with problems.

Health Minister Sussan Ley said research showed the best way was to put everyone on the system by default.

If a person did not want to be on the system, they would need to opt out.

"A personally controlled electronic health record is theirs," she said.

"It's not going to be out of their control and we are going to give the community the confidence they need."

A review of the personally controlled electronic health records released in 2014 found significant challenges with the opt-in system and a lack of focus on those who needed the e-health records the most.

It recommended moving to an opt-out system.

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Ms Ley said it was important that all Australians sign up to e-health to ensure the system functions well.

"Trialling an opt-out model means we can do it carefully, methodically and ensure the appropriate protections are in place to give patients peace of mind," she said.

"It's vital as you move between different clinicians in the health system that everyone has that information."

Patients will have the power to suppress parts of the record they do not wish to be seen, as the health record will be controlled by the patient.

Funding of $485 million for the e-health record will be announced in this week's budget.

The Government estimates a fully functioning national e-health system could save taxpayers $2.5 billion per year within a decade, with an additional $1.6 billion in annual savings also delivered to the states.

Ms Ley will meet her state and territory counterparts to set up two separate trials of the new e-health system.