Camilla Cavendish, who worked as David Cameron’s director of policy, said hospitals were being “crippled” with pensioners suffering from dementia.
She now wants Inheritance Tax upped in a bid to cover the escalating costs of old age care.
Similar proposals were rejected by the Conservatives in 2009 when a similar idea was suggested by the Labour party.
Baroness Cavendish turns heads with her shock new death tax proposal
We need a death tax to fund social care
But, in an apparent U-turn, Baroness Cavendish said: "We need a death tax to fund social care.
“Few of us what to think about old age, but we must because the NHS is being crippled by the growing number of elderly people with diseases like dementia.
“Tens of thousands of hospital beds are now occupied by patients who are well enough to leave but too frail to go home alone.
The former No 10 advisor said the NHS was 'crippled' by lack of social care
“They need social care, a nursing home or visits from carers but some families are facing crippling bills of over £100,000 and some care homes are closing because they can’t make ends meet.”
Baroness Cavendish added the NHS was created for “repair and care” and not to “help pensioners with dementia get washed and dressed every day”.
She suggested that Britain should take note of a similar scheme imposed in Japan, where everyone over 40 pays a compulsory levy for their old age care.
The NHS would receive extra funding with such proposals Shocking charts show the NHS could be in crisis Thu, February 9, 2017
Do these charts prove the NHS is in trouble?
Getty Images 1 of 9
She said: “In the UK, we could cap the cost of social care by raising National Insurance but we’d have to start charging pensioners too and – with Brexit looming – this could become a tax on jobs.
“Instead, we should charge people after they die by raising Inheritance Tax.”
Baroness Cavendish finished: “When Labour proposed this in 2009, the Conservatives dubbed it a ‘death tax’, a ‘RIP off’, but we can’t afford decent social care unless we tax either the living or the dead.
“And it’s surely better to tax wealth than income.”