The federal budget, handed down in May, contains a $5000 annual limit on allied health services, which comes into effect from July 2027.
Veterans' Affairs Minister Matt Keogh has been under fire from veteran groups and the coalition about the cap, with warnings it would exacerbate health issues.
But he said the measure would increase access to allied health for veterans, and not have them constantly going back to doctors.
"It's about making it easier for veterans to be able to access those services by removing the treatment cycle," he told parliament on Thursday.
"We would always ensure that there was continuity of access, and that we would engage with all of the veteran community in relation to how we made sure that we maintained that good access."
Mr Keogh also denied the government was gaslighting ex-servicewomen by not having a women's veteran strategy.
"The Department of Veterans' Affairs has been working and leading the work on consulting with our women veterans and with women serving personnel and defence on developing a women's strategy," he said.
The controversy over the cap prompted Tasmanian senator Jacqui Lambie, a former servicewoman, to share her own experience with a significant medical issue in an emotional address.
The former army member on Wednesday told the Senate about the struggle other female veterans faced in accessing healthcare due to the low prices paid by the Department of Veterans' Affairs.
Senator Lambie said she began experiencing vaginal prolapse about six months ago, which was connected to back injuries incurred during her military service, but paid $7000 to have an operation in Canberra due to limited availability of gynaecologists in rural and regional Tasmania.
She used her speech to urge the government to get rid of the cap.
"I would like to ask the prime minister, (Defence Minister Richard) Marles and (Veterans' Affairs Minister Matt) Keogh what they would do if their penises were hanging by a thread, and what would they do if treatment for that injury, directly connected to their military service, was denied by the Department of Veterans' Affairs?" she said.
"Would they say, 'OK, no worries. I don't really need my penis'? I don't think so.
"I'm begging you, prime minister. We are already suffering enough. Drop the bloody cap. Drop it, mate. It is so unfair."
9°C