Private health cover won't necessarily drop off following the planned Medicare shake-up, Federal Treasurer Wayne Swan says.

Up to two million Australians may soon be exempt from the $600 Medicare levy fee under changes to be outlined in Tuesday's federal budget.

The federal government has announced it will double the income threshold for the levy kicking in, from $50,000 to $100,000 for singles.

The income threshold for couples will also rise from $100,000 to $150,000.

Unfair pressure

Mr Swan says the thresholds, unchanged since 1997, put unfair pressure on working families.

"This initiative will benefit potentially up to two million people; it is only fair that they should be able to make the choice," Mr Swan told reporters today.

Asked if the measure would see people leaving the private health insurance system, Mr Swan says: "I don't accept that necessarily.

"If they are satisfied with their private health insurance they'll keep their private health insurance."

Mr Swan says lifting the thresholds, originally intended to coax people into the private health sector, had been a pressing issue for the government.

"There's probably no issues on which I have received more representations over such a long period of time than this issue," he said.

"The unfairness of the thresholds and the reluctance of the previous government to adjust them a decade."
Source: AAP