Boris Johnson’s majority plunged to just 26 last night, following a rebellion over controversial changes to social care plans. Means-tested, state-funded payments will no longer count towards the £86,000 limit on the amount people will have to pay for their care. Those with initial assets worth less than £186,000, and who have received such help, could be worse off as a consequence. Critics have pointed out that this is likely to disproportionately affect residents in the North or the Midlands because of differential house prices.

Johnson’s government isn’t the first to tie itself in knots over the issue of social care funding. Successive administrations have failed to bring about reform over the past 25 years, with most proposals swiftly abandoned.

And while governments procrastinated, the fuse on our demographic time bomb has shortened. The Office for Budget Responsibility projects spending on social care will increase by about 0.8 per cent as a share of national income over the coming few decades because of population ageing. Political pressures have already led, and will continue to lead, to even greater increases in spending.

The Tories’ plan is based loosely on the Dilnot proposals from 2011 — which suggested a more generous means-testing threshold and a cap on care costs — but it includes a ratcheting up of national insurance rates to foot the bill, and then a permanent new levy which further complicates our crazy tax system. The manifesto-busting hike was presented as a long-term fix — but it means the tax burden for working-age people will increase to prevent wealthy pensioners from needing to sell their homes to pay for care.

But here’s the major flaw with the current social care debate: funding for the elderly falls into two distinct subsets, which are almost deliberately mixed up. First, we must ask how we provide for those who have neither income nor assets to pay themselves. The secondary issue, which receives vastly more attention, is how we assuage fears that those with the means will be expected to fund their own care. In short: it simply isn’t true that Johnson’s social care plans will ‘leave the poorest in England paying a larger share of costs’.

The first is a genuine problem: in recent years there has been a squeezing of local authority budgets which are used to provide care for those who cannot afford it — including, incidentally, the large numbers of younger adults needing social care — and the system is creaking at the seams. But there is too much concentration on allowing old people to bequeath their homes to their children, and it has impeded discussion over the wider issue of funding.

A decade ago, Andrew Dilnot acknowledged that the risk of individuals needing to use their own financial assets to pay for care was intrinsically insurable. We insure our valuables against theft, or we don’t and we accept that, if robbed, we lose everything. Of the 22.6 million homes in the UK, over three-quarters have insurance. But Dilnot hit a stumbling block when he discovered that private providers across the globe are reluctant to provide such insurance, believing that people simply don’t want to insure against growing old and infirm.

What no one articulated, until former secretary of state for social security Lord Lilley put it forward, was the possibility of having the public sector underwrite insurance and set up a public body to provide it. Determined free marketeers might argue that the state shouldn’t be involving itself in matters of insurance. But it’s a low-risk activity, which may become commercially viable, and complex problems often preclude straightforward solutions.

The proposal would bring the housing assets of the well-heeled elderly into play without obliging them to sell their houses. They would be presented with the option to take out a policy paid for in the form of a charge on the value of their house. The costs of social care would be deferred, until death or the sale of the property. If they decline, they have shaky grounds for complaint when the time comes to pay the bill. Those living in poverty would be supported by a state whose finances would be in better shape given we would no longer be subsidising the asset-rich.

We should not be taking money from average taxpayers, many of whom are not homeowners, to assist those living in houses worth millions. Nor can we continue to slap sticking plasters onto this festering wound, continually expanding government spending. The Johnson approach has been rejected by previous governments for good reason. Foreseeable demographic pressures on public sector finances will lead future generations to regret this government’s fudge.