Health Minister Peter Dutton has ruled out introducing the GP co-payment without Senate approval, because of legal advice that says it cannot be implemented without legislation.
The federal government used a legislative instrument to reintroduce indexation of the fuel excise, a move that requires parliament's approval within 12 months.
But Mr Dutton on Tuesday ruled out going down a similar path with the $7 co-payment because of opposition from Labor, the Greens and crossbenchers in the Senate.
The minister denied government negotiations with crossbenchers had stopped, saying he planned to meet independent Jacqui Lambie in the next 24 hours.
Labor, while welcoming the government decision, still wants the co-payment scrapped altogether.
Health spokeswoman Catherine King said it was clear there was significant opposition from the health community.
"And it is just bad health policy," she told reporters in Canberra.
