The federal government is being accused of attacking the health system to balance the budget, amid fears rising costs will deter the sick from seeking treatment.
The mid-year budget update on Tuesday reveals health has borne the brunt of the government's clampdown on spending, with changes to bulk-billing from July 1 expected to save $650 million over four years.
The government plans to remove bulk-billing incentives for pathology services, reduce the bulk-billing incentive for magnetic resonance imaging services and align bulk-billing incentives for diagnostic imaging with GP services.
It will save more than half-a-billion dollars from changes to aged care funding and almost $600 million by streamlining funding for health workforce programs.
It's also scrapping a program aimed at improving access to radiation oncology, saving $26 million.
There are spending increases with more than $200 million to tackle the drug ice, $627 million to put new medicines on the pharmaceutical benefits scheme and $180 million to support the Tasmanian health system.
The government is no longer proceeding with its planned merger of the National Blood Authority and the Organ and Tissue Donation and Transplantation Authority.
Labor and the Australian Medical Association slammed the budget update as an attack on the sick and the poor.
"This is a government who will have a wind farm commissioner, but chase down payments going to people requiring Medicare support for diagnostic images and pathology for the treatment of cancer," Opposition Leader Bill Shorten told reporters in Sydney.
Opposition health spokeswoman Catherine King said the measures were worse than anything former prime minister Tony Abbott came up with.
"Malcolm Turnbull has proven that no matter who the leader is, the Liberals only ever see health as a source of budget cuts and will always look to make health less affordable for those who need it most."
Health Minister Sussan Ley said the cessation of the Better Access to Radiation Oncology program would have no effect on frontline services when contracts expire next year.
She said the competitive nature of the pathology industry drove high bulk-billing rates without the need for government support.
"It's disappointing Labor always seem to stoop to scaring patients when it can't find a legitimate reason to oppose sensible health policies proposed by this government."
Consumers Health Forum boss Leanne Wells said changes to pathology bulk-billing would force patients to forgo tests.
"Many patients requiring pathology tests would face out-of-pocket costs for the first time under these budget measures," she said.
Pathology Australia said patients would suffer, bulk-billing rates would drop and laboratories and collection centres could be forced to close.
"Some may even choose not to fill their pathology referrals and thus will not receive essential tests," chief executive Liesel Wett said.
Finance Minister Mathias Cormann told ABC radio he could "absolutely guarantee" that every patient who needed tests would get them.
