A national review has been launched into the rates councils pay for social care to prevent more homes going bust.
The Government is considering forcing councils to pay more towards it despite cutting their funding for social care by 27% since 2010.
Experts warn the system is close to collapse as care home firms say they cannot afford to continue on per-resident council rates.
Homes currently charge “self payers” an extra £236 every week compared to the amount firms receive for a council-funded resident.
Those who can pay for their own care now subsidise council-funded residents and as a result care homes are closing in less well-off areas.
At least 1.3 million pensioners now live in areas where there are no care home beds available.
Care England, which represents the homes, has threatened legal action arguing that under the current funding formula they do not even cover their costs.
In response the Department of Health and Social Care will now review the 2019/20 Funded Nursing Care (FNC) rate.
Ian Hudspeth, of the Local Government Association, said: “Adult social care faces a £3.6billion funding gap by 2025 just to stand still.
“This needs to be addressed in the Spending Review and the Government’s much-delayed green paper must provide the long-term sustainable funding solution which adult social care urgently needs.”
The Mirror launched the Fair Care for All campaign to tackle the crisis in the part-privatised system.
Vital reform has been repeatedly delayed under the Tories leaving councils to tighten the eligibility criteria.
Residents getting state-funded care has fallen by a quarter, while self-payers have risen to 41%.
Prof Martin Green, chief executive of Care England, said he “welcomed the move by the DHSC to look again at the 2019/20 rate”.
He added: “We hope this can be conducted speedily and a new rate decision made that increases the current rate to properly reflect the costs of providing nursing.”
Homes charge self-payers around £600 a week in England, and £840 a week for those needing more care.
The outcome of the FNC review will be announced later this year.
