The federal government has defended moves to outsource Medicare, pharmaceutical and aged-care benefits delivery to the private sector.
It says the $50 billion outsourcing would create savings by replacing back office work done by bureaucrats.
At the same time, it would also expose the confidential health information of Australians to the private sector.
The opposition says it will fight any attempt to push ahead with the plan.
Eighteen months ago, the Health Department put out a call for expressions of interest from the private sector to provide payment services for Medicare, the Pharmaceutical Benefits Scheme and Veterans Affairs.
The government said at the time that allowing the private sector to process the payments could provide better service at a lowest cost to the taxpayer.
Health Minister Sussan Ley has confirmed the government is still considering outsourcing the Medicare payments system, but insists no final decision has been made.
Prime Minister Malcolm Turnbull, meanwhile, says an overhaul of the Medicare system is a necessary part of the government's focus on innovation in the economy.
"The Government is as always totally committed to Medicare. What we are looking at, as we look at in every area, is improving the delivery of Government services, improving the delivery of Government services. This is about making it simpler and faster for patients to be able to transact with Medicare, to get the services they are entitled to."
According to media reports, planning on the proposal to outsource the Medicare payments system is well advanced - and will be a key feature of Treasurer Scott Morrison's first Budget in May.
If it goes ahead, the outsourcing would be the first time the private sector has delivered a national service subsidised by the government.
Under the reported plan, it would administer claims and oversee eligibility criteria for the payments; giving it access to people's private information.
Opposition Health Minister Catherine King says the risks associated with selling the electronic health data of Australians, potentially to a foreign company, are too high.
"The Medicare data of Australian citizens is highly sensitive data. It is highly private data and the concept that the government seems to be progressing substantially that they would outsource to a for-profit company, our Medicare, our PBS and our aged care payments system, frankly is an utter disgrace."
Human Services Minister Stuart Robert dismissed the concerns, saying digitising the Medicare payments system makes sense.
"With multiple billions of dollars of payments, the problem is, we are so tied to a paper-based system now. What the Government wants to do is investigate areas where we can actually use technology to benefit the payment of health systems and the problem we have is those opposite are so addicted to quill and ink, they actually want to keep us back in a paper-based environment."
Opposition leader Bill Shorten says if the government insists on making it an election issue, he is willing to take up the fight.
"If Malcolm Turnbull wants to make the 2016 federal election a fight about Medicare. Labor will stand-up for Medicare for Australians."
Questions on Medicare, aged-care, private health insurance, social security and disability services will be examined in Senate this week.
