Independent MP Andrew Wilkie says he won't support Labor's plan to means test private health insurance as it backs away from his pokies reform.
His declaration follows a meeting between him and Prime Minister Julia Gillard at Parliament House on Thursday night.
Labor is hoping to save $2.8 billion over four years by means testing the rebate and increasing the Medicare levy surcharge for people lacking cover.
The government failed to get the measure through parliament, and had hoped to woo crossbench MPs in 2012.
But those plans are now jeopardy after Mr Wilkie's declaration he would not support means testing private health insurance.
'Because a lot of time has passed since then, I now need to look afresh at that issue and look afresh at the evidence I had then and see if there is any new evidence,' he told News Ltd.
Labor's failure to secure a deal on means testing private health insurance rebates also threatens the size of the government's planned return to surplus in the next financial year.
Mr Wilkie's comments come as Ms Gillard reportedly has told him her government will not support mandatory pre-commitment laws on poker machines.
In May, Mr Wilkie said he had yet to be convinced means testing the rebate would work, but he had to declare a political position.
The government wants to introduce a means test for individuals earning more than $80,000 and families earning more than $160,000.
The Senate has twice knocked back similar attempts.
