The federal government's plan to dump its Medicare co-payment will cost the budget just under $1 billion.
The coalition party room on Tuesday was told the government had dropped its $5 doctors' charge.
Treasurer Joe Hockey told reporters after the meeting the cost of the decision over four years came to "a little less than $1 billion".
"We've obviously listened to the medical community and we are going to continue to work closely with the medical community," he said.
"But it's vitally important we continue on the path of getting to the point where we as a nation are living within our means."
Mr Hockey said Labor failed to understand that "knocking off savings measures" would have a negative impact on the budget.
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