A plan to cap rebates for out-of-hospital costs will lead to higher hospital admissions and suicide rates, rather than save the public money, doctors warn.

The Turnbull government had hoped its changes to the Medicare Safety Net would take effect from the start of next year. They are expected to save $266.7 million over five years, which would be put into the Medical Research Future Fund.

The changes will lower the spending thresholds required for patients to access benefits, but cap the benefits payable for individual medical services once this has been reached.

Psychiatrists and oncologists renewed their calls for changes to the legislation, which they say will make life-saving services more expensive for people who need them most.

The bill, introduced into Parliament last month, was referred to a Senate committee after Labor announced it would oppose it. This means the government will rely on the Greens and crossbench senators to pass the bill in the last sitting fortnight of the year.

The president of the National Association of Practising Psychiatrists, Dr Shirley Prager, said psychiatric items should be exempt from the cap, which would make treatment unaffordable for many patients with complex disorders. This would lead to an increase in suicides and homicides, she said.

There would be “no net savings” from the changes, which would increase costs to the health system through higher emergency ward and hospital attendances.

“People who can work with treatment will no longer be able to and are likely to go on to disability pension.”

She rejected Health Minister Sussan Ley’s comments that the safety net served people in the wealthiest suburbs rather than those who needed it most, saying there was no evidence the changes would more evenly distribute public subsidies.

Radiologist Dr Dion Forstner said he supported making the scheme easier to access, but said this appeared to come at the expense of chronically ill who would have no trouble reaching the current threshold.

Dr Forstner, a dean at the Royal Australian and New Zealand College of Radiologists, said he would be more likely to support changes to the safety net once the review into the Medicare Benefits Schedule – due to be complete at the end of the year – was released.

Keith Hansen, executive manager of Cancer Care, said the safety net had helped many cancer patients in low socio-economic areas to afford treatment. While well-intentioned, the bill was a “simplistic cut to health care funding for the chronically ill.”