The Queensland premier will not "necessarily" open the state borders once 80 per cent of eligible people are vaccinated, saying hospitals need to be ready for a surge in COVID-19 cases.
Prime Minister Scott Morrison has accused the premier of using the border to "extort" him for more health funding.
Premier Annastacia Palaszczuk denied that, saying Queensland has signed a letter with all other states and territories calling for a rethink on health funding.
"These are pressures that are being felt right around the country, that's why the health ministers wrote that letter to the federal health minister," she told reporters.
"These are extraordinary times, and the pressures are not unique, and other premiers also raised these issues at national cabinet."
The premier said the states had been raising the issue of federal health funding since before the pandemic began.
Queensland hospitals are already facing huge capacity pressures without a large virus outbreak in the state.
The Australian reported on Tuesday there were 31 'code yellows' - when hospitals start to run out of beds and ambulances are forced to divert to other emergency departments - in September.
The state Liberal National Party has also revealed Queensland Health data showing 60 per cent of patients spend more than 30 minutes 'ramping', or waiting in the back of ambulances to be treated.
Ms Palaszczuk said opening the borders was not solely tied to federal health funding.
She also said it would not be automatic once 80 per cent of eligible Queenslanders were fully vaccinated.
"Not necessarily, it depends on the situation of the day. It depends on what's happening in NSW and Victoria. So we are watching all of those issues very closely," she said.
The prime minister said earlier there was already enough federal funding for state hospitals.
Mr Morrison accused the premier of using border closure to "extort" him.
"I'm just calling it as I see it," he told Nine's Today program.
"To suggest that they're not going to open the borders unless I send them cash, how else would you like me to call it?"
Queensland Health Minister Yvette D'Ath stressed that all states and territories were making a joint push for fresh talks on federal funding, not just her state.
It was incorrect for the prime minister to categorise the health funding debate as a Queensland issue, she said.
"This is a national conversation, it's not a fight between the Commonwealth and Queensland," Ms D'Ath said.
"It is every single state and territory, saying that our health system was under extensive pressure and demand prior to COVID that required a rethink in the funding model going forward."
Federal Health Secretary Brendan Murphy said most states and territories were "comfortable" with reopening plans and a 100-page document presented to national cabinet shows the hospital system will cope.
However, he said the document was being kept confidential by national cabinet.
"I would favour a transparent approach, but national cabinet will make that decision," Prof Murphy said.
© AAP 2021