The government has moved to simplify the system which determines who is entitled to free long-term care.
The rules regarding long-term care changed five years ago
The Department of Health consultation sets out guidance for eligibility to NHS continuing care in England.
People needing nursing support in the community for health reasons are entitled to it free rather than it being means-tested as social care.
But campaigners have claimed many patients are being denied it because of confusion over eligibility criteria.
Traditionally, nursing care for people with long-term illnesses was effectively classed as social care and as such was means-tested.
This meant there were many cases where patients were having to sell their homes to fund their care.
But a legal challenge forced the government to change the system five years ago for nursing care, although it does not extend to personal care such as help dressing despite pressure from campaigners.
Patients - either in their own homes or a care home - are now entitled to the support free on the NHS if their need is primary caused by a health reason. About 21,000 currently receive it.
But the Health Service Ombudsman has warned there was confusion over who was eligible, meaning there were regional variations in who received the funding from their local NHS organisations.
Under the consultation, the government has attempted to spell out who should be get the funding.
It said the NHS must take into account four key indicators - nature, complexity, intensity and unpredictability of need.
It has also suggesting scrapping the banding system, which meant patients had to undergo assessments to see how much funding they should be entitled to.
Instead, the consultation recommends all eligible patients be given £97 a week towards their care.
Care Services Minister Ivan Lewis said the proposals would reduce the "administrative hoops" patients have to jump through.
"This is a sensitive area which affects many vulnerable people."
Ann Abraham, the Health Service Ombudsman for England, said the consultation was an "important step" in establishing clear, national, minimum eligibility criteria.
But Gordon Lishman, director general of Age Concern, said many of the people who were entitled to the funding were not receiving it.
"Continuing care is broken and the proposals in this consultation will not fix it.
"We welcome the proposals to simplify the system from three bands to one, however the rate set - £97 - is simply not high enough to cover all the costs of nursing care in care homes.
"Older people and their families will be forced to cover this shortfall to pay for their own nursing care."
And Pauline Ford, the Royal College of Nursing's adviser for older people, said she was dismayed at the £97 funding available.
"This would buy just seven-and-a-half hours of registered nursing per week and in no way reflects the real costs of nursing people with long-term, complex health needs."