The government aims to save $2 billion by introducing a means test for individuals earning more than $80,000 and families earning more than $160,000.
The Senate has twice knocked back similar attempts.
This time the government is facing a battle just to get the changes through the lower house.
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Australian Greens MP Adam Bandt, who supports the move, warned the government the measure was watered down to appease other MPs and he could not support any changes to the existing system.
"Especially if we don't know where the shortfall is going to come from," he told reporters in Canberra on Thursday.
Earlier in the week independent MP Andrew Wilkie said he had yet to be convinced means testing the rebate was the most sensible thing to do.
Mr Wilkie said while he supported more money being directed into the public health system he feared people would forsake private health insurance and put further pressure on the already stretched public health system.
Premiums could be forced up as a result of the reform, he said.
Mr Bandt warned by pleasing some quarters with changes it would risk his support.
"The government may negotiate something that wins some people's votes but they may lose others," he said.
"We cannot guarantee that we would support a watered-down version especially if we don't know where the potentially multi-billion shortfall is going to come from."
Public money would be better spent in the health system than directed into the coffers of health insurers, Mr Bandt said.
"You get much better bang for your buck by putting the taxpayers' dollar into the public health system," he said.
Opposition health spokesman Peter Dutton said the government-owned insurer Medibank Private had estimated 37,000 people would drop out of health insurance for its products alone.
It estimated 92,000 would downgrade their level of insurance, pushing up premiums for the 10 million Australians covered by the funds.
"We are on the makings of another policy disaster in this country if we drive up the prices so high ... people desert in the hundreds of thousands," Mr Dutton told reporters.
"And for those who remain, those on low incomes in particular will face much higher premiums as a direct result of a bad policy."
