Social care costs in England should be capped so people do not face losing large chunks of their assets, an independent review says.
Council-funded home help and care home places for the elderly and adults with disabilities are currently offered only to those with under £23,250 of assets.
The Dilnot report said the threshold should rise to £100,000 and a £35,000 lifetime cap on costs would be "fair".
But the Treasury is known to have doubts about the expense of the plans.
Just over £14bn a year is spent by councils on social care.
However, the changes would cost an extra £1.7bn a year if they were implemented now - and this figure could rise by 50% as the "baby boom" generation begins to retire.
Last year the coalition government asked economist Andrew Dilnot to look into how the system of funding social care in England could be changed amid concerns it was getting harder for people to get access to state support.
The ageing population and squeeze on council budgets have led councils to impose stricter criteria on who can get help.
It means while 1.8m are getting state funding, another 1m-plus either have to pay for support themselves or go without.
Mr Dilnot's commission has ruled out calling for care to be free.
Instead, it has recommended a partnership between the state and individual whereby the high costs are covered by the government - one in 10 people aged over 65 faces care costs of more than £100,000 over their lifetime.
But the individual should be liable for the first tranche of care with a cap in costs set at between £25,000 and £50,000, the report said.
It went on to suggest £35,000 as the ideal figure - a third of over 65s face sums above this amount.
Below the age of 65, the cap should be phased in. For young adults below the age of 40 to 45 it should be free - although in reality this makes little difference as hardly any pay now because those with care needs at that age have often not had time to accrue savings or buy property.
After that age, the cap should be gradually phased in by £10,000 each decade.
The hope is that with the state paying for the high-cost cases, the insurance industry would be encouraged to develop polices which would cover any care costs below the cap.
The cap will not include so-called "hotel costs" for food and accommodation. However, the report said there should be a standard charge which could be around £7,000 to £10,000 per year.
Means-testing should remain so that the poorest would not have to pay, the commission recommended, but the threshold increased to £100,000 for residential care to better reflect the rise in property prices seen over the last two decades.
The commission believes the cap and rise in the threshold will mean no-one will lose more than 30% of their assets paying for care.
Mr Dilnot said the money would have to be found by making cuts elsewhere or raising taxes and he said any tax rise "should be paid, at least in part, by those of retirement age".
Launching the report, he added: "The issue of funding for adult social care has been ignored for too long.
"The current system is confusing, unfair and unsustainable. Individuals are living in fear, worrying about meeting their care costs.
"Putting a limit on the maximum lifetime costs people may face will allow them to plan ahead for how they wish to meet these costs."
The report also called for an end to the ever-tightening restrictions being placed on access, arguing there should be a national standard so everyone had the same access no matter where they lived.
The commission has already had talks with the Treasury about the proposals. It is understood that government officials voiced concerns whether extra money could be found in the current financial climate.
Health Secretary Andrew Lansley acknowledged finding the money remained a challenge, saying such change would require "significant cost" and need to be balanced against other funding priorities.
However, he said despite this social care was still a "priority for reform" and the commission's report would be "carefully considered" before the government put forward its proposals next spring.
Labour leader Ed Miliband said he would be willing to have cross-party talks to try to reach a consensus on the issue.
The recommendations already have widespread support among charities and campaigners with many arguing it provided the blueprint for reform.
Michelle Mitchell, of Age UK, said action was long overdue: "Social care is at crisis point. Vulnerable people are going without care and that means their conditions are worsening and they are ending up in hospital and costing the government more. We cannot go on as we are doing."
Any overhaul of the system would take about four years to introduce.