Prime minister Gordon Brown has suggested an insurance model may not be a reliable way to fund future social care provision.

Launching a six-month consultation in the lead-up to next year's social care green paper on Monday, Mr Brown said that a reformed and sustainable care system was "one of the great concerns and challenges of the future that we have not, as a society, fully addressed".

He said: "Even in the US, which is a system that relies almost entirely on private insurance, only 10 per cent of people are insured against the possibility of needing social care in retirement, so there is no country in the world where insurance is developed fully for this kind of social care that we are talking about for the future."

Consensus on the need for radical change has been building since the publication in 2006 of Sir Derek Wanless's report on funding long-term care for the elderly. Sir Derek said the most cost-effective improved care system would require co-payments where the public were incentivised to "top up" a free minimum package.

The reforms would cost an extra£4.3bn a year. The NHS Confederation has since advocated the establishment of a social insurance system to encourage people to save in order to make adequate co-payments.

Confederation deputy policy director Jo Webber said she did not think Mr Brown's comments implied he had dismissed the confederation's proposal. She said: "They will want to look at international models and the pros and cons and then take the best bits. This is a genuine consultation because they don't know [yet] what the options might be."

The Association of British Insurers' head of health and protection Nick Kirwan said the insurance sector was ready to develop products to help people plan to provide for part of the cost of their own care.