Abbott scraps plans for the $7 co-payment

Prime Minister Tony Abbott has announced the government will ditch plans for the $7 Medicare co-payment.

Instead from July 2015 an optional co-payment will be introduced and the Medicare rebate to GPs will reduced by $5.

It will be up to doctors to decide whether their patients make up the difference or bulk bill them.

Incentives to bulk bill concession card holders and children under 16 remain in place.

Mr Abbott said the new package had significantly improved the government's co-payment measures, while at the same time maintaining the desired price signal.

"But I do want to stress ... bulk billing stays for young people and for pensioners, and the co-payment is at the option of the doctor," he told reporters in Canberra.

Mr Abbott said the government was addressing what he called six-minute "sausage machine" medicine.

"We will