Free social care for everyone over-65s could save the NHS in England £4.5 billion a year, according to a think tank.
The Institute for Public Policy Research (IPPR) says that the move would remove fears about savings for millions and put dementia patients on same footing as those with cancer.
The IPPR argues that free care at the point of need should be extended to social care services in England - bringing it into line with Scotland - and more than doubling the number of people receiving state-funded care.
It says the changes could be funded by an increase in taxation of 2p or National Insurance of 1.3p.
By doing this, the number of people with access to state-funded care would increase from 185,000 to 440,000, helping hospital patients back into the community and saving the NHS up to £4.5 billion.
Under the proposal, older people would still have to pay for their accommodation costs but all care would be free.
While spending on adult social care for the over-65s would rise from £17 billion a year to £36 billion in 2030, the IPPR notes that £11 billion of that increase would arise even without changes and bring benefits to the wider economy, including 70,000 more jobs.
Spending on social care has fallen by more than 10% over the last decade as local authorities have slashed their budgets.
Currently, people with dementia have to pay for their own care, whereas people with cancer get free treatment from the NHS. The IPPR says that under the proposal dementia sufferers would receive care in the same way that cancer patients do.
Harry Quilter-Pinner, senior research ellow at IPPR and lead author of the report, says: “If you develop cancer in England you are cared for by the NHS, free at the point of need for as long as it takes, but if you develop dementia you’re likely to have to pay for all your own social care - running up potentially catastrophic costs in the last years of your life. This makes no sense.
“By investing in personal social care so it is free at the point of need for everyone over 65, we can provide a better and more integrated care system, one that’s fairer to us all and saves the NHS £4.5 billion a year.”
Last month, former Conservative cabinet minister Damian Green proposed that a 1% National Insurance (NI) hike for the over-50s costing around £300 a year could help fund a fairer social care system. The winter fuel allowance would also be taxed.
Mr Green argued that the care system should adopt a similar model to the state pension system. Everyone would be entitled to a similar level of support, but individuals would be encouraged to top this up from their own savings or housing wealth.
This would be boosted by the “care supplement” – a new form of insurance which would pay for “larger rooms, better food and more trips”.