Council run care homes in Norfolk may require families to pay top up fees to enable loved ones to remain in residence.
Norfolk County Council is warning that unless improved funding arrives from the government, families will have to pay for the shortfall.
At a time when the care industry nationwide is suffering financial problems, Norfolk, which has the UK's fastest ageing population, is struggling to keep up.
John Sharples, chairman of the Norfolk Joint Care Partnership, commented: "It is generally recognised that there is a gap between what is being paid by the local authority and what is needed to cover the cost of providing what is quite expensive care.
"Unless millions of pounds more each year are invested into social services, it simply isn't going to be possible to meet the region's increasing needs."
It is estimated that the county will require an extra 650 beds over the next decade just for dementia sufferers.
Some good news was offered by Chris Mowle, the cabinet member for adult social services, who told the Norfolk Eastern Daily Press that part of the expected demand in services could be met through inexpensive home care schemes.