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The Australian government on Monday won backing from a key Senator for its plans to make it easier for people to abandon private health insurance.

The Australian government on Monday won backing from a key Senator for its plans to make it easier for people to abandon private health insurance, in a move set to upset listed private health insurers.

Key independent Senator Steve Fielding said he would now support the government measure, which he voted against in September and which failed to pass through parliament by only one vote.

The government has re-introduced the legislation and Fielding said he would now support all of the government measures announced in the May budget, to help add stability at a time of global uncertainty.

"We need to give that stability to the government's budget," Fielding told reporters.

The private health insurance industry has warned the government plans would lead to 400,000 people dropping their private health cover.

The government originally planned to raise income thresholds to A$100,000 ($84,000) before single Australians must pay a one percent surcharge on their income if they do not have private health insurance.

But in a compromise designed to win support in the Senate, Health Minister Nicola Roxon has said the government would lift the income threshold to only A$75,000, with ongoing indexation for inflation.

The government plans have weighed down on the shares of Australia's top private hospital operators Ramsay Health Care Ltd and Healthscope Ltd and on private health insurance fund NIB Holdings Ltd. ($1=A$1.48)

(Reporting by James Grubel)