Liberal Democrat leader Nick Clegg has outlined a £2bn "care guarantee" plan for the elderly, as part of his proposals to reform the NHS.
Nick Clegg says the NHS is "not good enough"
He said the extra cash should fund a minimum level of care for all who need it, ending the "scandalous injustice" of having to spend life savings.
Mr Clegg said people could also "top up" state contributions themselves.
Labour said the Lib Dems had "cynically ditched" an earlier commitment to free care for the elderly.
Under Mr Clegg's plans, elderly people could decide what type of care their government payments were used for.
They could make private contributions, which would be matched by the state, up to a maximum level.
People on low incomes would have the additional contributions made through the benefits system.
Mr Clegg said: "We are the first party with serious plans to end the punishing poverty which afflicts the many elderly people forced to pay for their personal care entirely out of their own pockets.
LIB DEM HEALTH PLANS
£2bn care guarantee for the elderly, based on need rather than ability to pay
Patient Contract, guaranteeing access to a high standard of healthcare within maximum waiting times
Directly elected local health boards instead of unelected primary care trusts
Direct payments and individual budgets for people with chronic, long term conditions, for mental health services and support for those with learning disabilities
Independent "advocates" for cancer patients
"We would introduce a personal care payment based on need, not on your ability to pay. It simply isn't possible to be committed to a free and fair NHS without ending this scandalous injustice."
Mr Clegg said he wanted to introduce directly elected local health boards, aimed at making NHS bosses more accountable.
He proposed giving patients more control over their own care, with the extension of direct payments and individual budgets to help people with chronic, long-term conditions, mental health problems and learning disabilities.
The Lib Dems say cancer patients should be advised by independent advocates on the best health and care options.
Mr Clegg said: "I am calling for a people's health service which puts individuals in the driving seat of their own healthcare.
"Sixty years after it was founded, the NHS is in desperate need of a new direction. The battle for extra investment has largely been won, but the service we are getting is simply not good enough.
"Cancer survival is below the European average and health inequalities have widened under Labour. Many older people are not getting the personal care they so desperately require. We are letting down those most in need.
"The question is not 'how much', but 'how we spend the money' so that everyone gets the healthcare they need."
Mr Clegg, who became Lib Dem leader in December, has said NHS patients should have a guarantee of treatment within a specified time.
If that is not met, they should have private treatment, paid for by the NHS, he argues.
Two weeks ago Conservative leader David Cameron said he wanted his party to replace Labour as "the party of the NHS".
He has overturned his party's previous proposals to subside patients to go private and said he would set up an NHS constitution.
Prime Minister Gordon Brown has said he wants a more "personalised" NHS with a bigger focus on prevention. He has also signalled that he will also press ahead with an NHS Constitution.
Health Minister Ivan Lewis said Mr Clegg's care guarantee for the elderly was "not worth the paper it is written on".
He added: "He may be a new leader but he is up to the same old Lib Dem tricks making promises which are uncosted, misleading and will never have to be kept.
"Under the cover of a new policy he has cynically ditched the Lib Dem manifesto commitment to free personal care for all elderly people."
However, Niall Dickson, chief executive of the King's Fund think tank, said: "We welcome the strong emphasis the Liberal Democrats have today placed on reforming a deeply unpopular system - one that has for so long not only damaged thousands of lives, but also wasted resources by failing to help people live independently without the need for more expensive support."
Paul Cann, of Help the Aged, said: "This Lib Dem policy package on social care is very attractive.
"Care is not cheap - and will become more expensive. Ensuring we have a fair and sustainable funding settlement is crucial to transforming our ailing social care system."
And Age Concern director general Gordon Lishman said: "We support the people-centred vision outlined by the Liberal Democrats today.
"This represents an important contribution to the debate about how to remedy the scandalous failure of the current social care system in England."