The fee was declared in the federal budget last Tuesday, to take effect from July 2015.

Patients who were bulk billed would have to pay $7, while fees for patients who paid for doctor visits would rise by about $5, the government said.

The Morisset clinic, which Waratah Medical Services runs, draws people from as far as Cessnock, Wyong, Newcastle and east Lake Macquarie.

It bulk bills and sees about 600 patients a day.

Dr du Plessis said the fee would lead to children with ear infections and people with pneumonia "flooding casualty departments at hospitals".

"Some people will end up dead," Dr du Plessis said.

"It's absolute madness."

A spokesman for Health Minister Peter Dutton said there was "no evidence to support these claims".

Dr du Plessis said the Morisset clinic provided bulk billing to a "community in desperate need" of medical services.

"Many people who come here don't have the money to pay," he said.

"Often single mums come in with three children all sick."

His practice saw people in their 90s, who did not have enough money for food.

"GPs are not supposed to be tax collectors," he said.

Mr Dutton said in a statement it was "not sustainable" to continue to fund 263 million Medicare services a year at no charge to the patient.

"There's been about 40 per cent growth over the course of the last five years," he said.

He said doctors would retain "discretion to bulk bill patients" and the taxpayer would still "provide support over and above $30" for GP visits.

Since the budget was announced, the Morisset clinic had "a significant drop" in patient numbers, Dr du Plessis said.

"I would say at least 30 per cent of patients think the fee is in place already," he said.

The $7 fee will apply to GP visits and services such as blood tests and X-rays, budget papers show.

Of the $7 fee, $5 would be used for medical research and $2 to supplement doctors' income.

"To take money from the poor for the excuse of medical research is criminal," Dr du Plessis said. "I personally think they have underestimated the intelligence of the Australian people."

Mr Dutton said "we need to find cures for cancer, dementia and diseases of the brain".

About $15 million had been invested in the Morisset clinic and surrounding health services, including $2.5 million in federal money from the former Labor government.

"The model for this clinic stands on the basis of bulk billing," Dr du Plessis said.

"If the fee comes in, the model falls apart."

Adamstown Clinic's Dr Paul Triggs said the government was trying to fix a problem, but "I'm not too sure it's the right way to go about it".

Dr Triggs said the government was "trying to discourage over-users of the system from clogging it up".

"A better system might have been to give people five or six free visits and then start [charging]," Dr Triggs said. "People with chronic problems should maybe get 15 to 20 visits a year before they start paying."

Dr Triggs said his clinic bulk billed healthcare card holders, pensioners and patients with chronic health problems.

Mr Dutton said a co-payment was already in place for medical scripts.

Soul Pattinson Morisset, which works in tandem with the super clinic, said providing affordable care at the GP and pharmacy stage of the health system "reduces the chances of people ending up in hospital".

"If a family sees a doctor three or four times a month and there's already pressure on their budget, they might not be able to afford their medicine," pharmacist Andrew Stone said. "When you're crook, you don't want to have to be digging into your wallet. We don't want to be like the Yanks."

Dr du Plessis said administering a $7 fee would be "a complete nightmare".

"This clinic is cash-free," he said. "I would need a system to collect and police the cash.' Will GST of 70¢ be needed for each fee?"

He said the fee would change the emphasis from preventative medicine to managing acute illness, which was more expensive.

"People won't come back to the doctors for critical follow-ups," he said.

"If I send them to get an X-ray for pneumonia, they will say 'sorry I don't have the money'."

Labor, The Greens and Clive Palmer have vowed to oppose the co-payment in the Senate, meaning it could be blocked or altered.