There are claims health fund premiums could rise by as much as 11 per cent as a result of changes made in the budget.
Currently, singles earning over 50 thousand dollars must have private health insurance or pay the one per cent Medicare levy.
But the Rudd Government is planning to double the threshold to 100 thousand dollars in tomorrow's budget, removing the incentive for many young people to take out insurance.
Industry experts warn 400 thousand people will dump their policies as a result, leading to a rise in premiums for everyone else.
It's also expected to hit health fund share prices, with young low cost members providing 20 per cent of fund profits.
Health funds say raising the Medicare levy threshold will put even more pressure on our already struggling public hospitals.
Manchester Unity CEO John Brogden has told 2GB’s Alan Jones this will have disastrous results.
“There will be queues out the door, round the corner and down the street in public hospitals.
“If people think waiting lists are bad now just imagine how much worse they’ll be when people leave private health insurance…”