Justine Christerson, the woman behind the social media campaign Breaking Down the Barriers for Rural Patients in City Hospitals, says she was horrified Australian Hearing had been listed as "available for sale" in the Department of Human Services' annual report.
"I'm horrified, if it goes private, it's just not going to meet the needs," she told a Senate inquiry in Rockhampton on Tuesday.
"I'm horrified, if it goes private, it's just not going to meet the needs"
Ms Christerson said the proposal would have huge impacts if it went ahead.
"There's enough barriers as it is in Indigenous communities to reach the health services that they need," she said.
The report has put the value of Australian Hearing at $49 million.
The Department of Human Services said Australian Hearing administered investments had been described as "available for sale" since at least the 2010/11 annual report but that the classification didn't imply that it was for sale.
The government has investigated privatising Australian Hearing but deferred plans to allow for more community consultation with a report due by the end of the year.
Finance Minister Mathias Cormann said the government was working with stakeholders to consider how Australian Hearing could remain viable once the National Disability Insurance Scheme was rolled out.
"The government has not made a decision to privatise Australian Hearing and there is no plan to privatise Australian Hearing," Senator Cormann said on Tuesday.
"There is absolutely no intention to change any of the eligibility criteria or benefits currently available for children under 26 with a hearing impairment"
He said people who currently received or were eligible for Community Service Obligation services would continue to receive them, either as NDIS participants or clients of the Hearing Services Program.
"There is absolutely no intention to change any of the eligibility criteria or benefits currently available for children under 26 with a hearing impairment," he said.
The Senate inquiry report is due by June 2016.