Proposed by Sen. Edward M. Kennedy (D-MA) as part of his health care reform bill, the plan would set up a new, voluntary social insurance program to help people insure against the high costs of long-term care. Americans would pay a premium of roughly $65 per month, although the Congressional Budget Office has said the premium could end up being as much as $110 a month — still far less than the typical cost of private long-term care insurance. After participants had contributed for at least five years, they would be eligible for a benefit of not less than $50 a day to cover long-term care costs.

While the benefit is modest compared to the average cost of nursing home care, it could be used instead to pay for a range of services that would help people remain in their homes. All working Americans would automatically be enrolled in Kennedy’s plan, known as the Community Living Assistance Services and Supports (CLASS) Act, but they could choose to opt out.  Students and the poor would pay only $5 a month.

In a letter to Kennedy, Health and Human Services Secretary Kathleen Sebelius said that President Obama considers the long-term care program an “innovative” idea that should be “part of health reform.”

“Enactment of this important legislation would expand resources available to individuals and families to purchase long-term services and supports to enable them to remain in their own homes in the community,” wrote Sebelius.

For many middle-income Americans, the Kennedy plan could be just enough to allow them to stay at home or to afford assisted living care. Medicaid “waiver” programs that offer home health services often have long waiting lists in the states that offer them. Many elderly or disabled individuals end up in nursing homes at government expense when all they actually need is help around the house or home nurse visits.

McLaughlin & Quinn’s Law for Life attorney Jill E. Sugarman called it “a huge step in the right direction.”

For more on Sen. Kennedy’s health reform bill, click here.

For an Associated Press article on President Obama’s support for the CLASS Act, click here.

To listen to a National Public Radio report on the topic, click here.