As lawmakers work out the details of health care reform, one sweeping new provision winning widespread support would set up a new national insurance program to help older adults and people with disabilities live in their homes and communities instead of in nursing homes.

The plan, paid for through employee payroll deductions, would offer Americans a choice to enroll and pay monthly premiums. In return, their coverage would provide cash payments of around $75 a day when they need help with daily activities such as bathing, dressing or eating. The money could also be spent on assistance such as a wheelchair ramp or other home modifications, even respite care—extra help to give caregivers a break.

Proponents of the idea say it will save taxpayers’ money by reducing state and federal Medicaid spending on long-term care, since it provides older Americans and those with disabilities the dignity and independence of living in their homes or with relatives or in assisted living facilities.

“It will have a major transformational impact on the cost of long-term care in this country, which everyone agrees is out of control,” says Larry Minnix, CEO of the American Association of Homes and Services for the Aging in Washington, a group of nonprofits that provide services to older adults. “The term no-brainer comes up again and again.”

Opponents say that people most likely to need this kind of coverage will flock in disproportionate numbers to the plan, driving up the premium costs so much that healthier individuals won’t participate, thus endangering the whole program.

“It would not be right to set up a program that people expect a benefit from in the future … [but] the program may not be there when people need it,” says Whit Cornman, spokesman for the American Council of Life Insurers.

The Community Living Assistance Services and Supports (CLASS) program, as the long-term care insurance is dubbed, is included in the House bill that passed Nov. 7. The Senate’s Health, Education, Labor and Pensions Committee has also included the measure. The Senate Finance Committee, which did not have jurisdiction over the issue, did not include it. But lobbyists who favor the idea hope it will be included in the Senate’s final bill when those two committees combine their efforts. The Obama administration also backs the idea.

Measure brings in money

The House provision would save more than $72 billion in the first 10 years.

That’s because consumers will pay premiums for five years before anyone is eligible to start receiving benefits. And when people do draw the benefit, some will use the money they receive to pay for services at home instead of going into expensive nursing homes paid for by Medicaid. But Sen. Kent Conrad, D-N.D., once dubbed it a “Ponzi scheme.” Conrad and other fiscally moderate senators have urged that the program be dropped from the reform bill, saying it could end up creating an entitlement whose costs far exceed premiums.

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