Americans born in 1900 lived on average to be 47 years old. Life expectancy for those born in 2005 is 78 years. In a little more than 100 years, the life span of Americans has increased by more than 30 years. At the same time, mortality rates for once fatal conditions such as heart disease and strokes have declined and survival rates for cancer have increased. These are significant achievements resulting from advances in medical care, breakthroughs in treatment, new drugs, better nutrition, improved lifestyle and even safety standards.

But even as progress has been made in life expectancy, we have seen an increase in the prevalence of chronic conditions and associated disabilities. We are living longer, and we are surviving afflictions that were once considered an automatic death sentence, but more Americans are suffering from diseases and conditions in their later years that severely hinder their quality of life, cause disability and, too often, force them out of their homes and into institutions.

A longer life sometimes means living with some of the infirmities of older age. But living with the aches and pains that come with age is one thing; being immobilized and housebound or being forced into a nursing home are altogether different circumstances.

More than 1 million Americans are living in nursing homes, but many would prefer to live in their own homes and stay in their own communities. The institutional bias of Medicaid is a big reason why. In most cases, Medicaid will pay for nursing homes but not for home or community-based care, even though those services would be far less expensive. In fact, three people could be cared for at home for a cost equal to one person in a nursing home.

For those living with disabilities, Parkinson’s disease, Alzheimer’s, multiple sclerosis or other functional ailments, Medicaid won’t pay for home care and poverty is an entry qualification for nursing home care. Medicaid requires would-be patients to spend down all their money, including any equity in a house, before they qualify.

The rules and practices of existing programs have not caught up with contemporary realities, such as an aging population, medical advances and longer life spans. Right now, two-thirds of all Medicaid dollars go to nursing homes. What we need is a new focus on helping people overcome barriers to independence. We should facilitate the needs of those who want to live at home, to stay with their families and to function in their communities. And we should support those who want to hold a job and need only basic assistance in order to stay at home and stay employed.

It often doesn’t take much nor does it cost much. Housing modifications, assistive technologies, transportation and personal services are among the basic needs that can make the difference between institutionalization and independence.

There are an estimated 10 million Americans who right now are in need of home services. This number will climb to 15 million by 2020 and to 26 million by 2050. But we lack a system, either public or private, that is able to meet this need. This is a national problem that needs a national solution. That is why Sen. Edward Kennedy (D-Mass.), Rep. John Dingell (D-Mich.) and I have formulated a plan, titled the Community Living Assistance Services and Supports Act, or CLASS Act, and why Sen. John Kerry (D-Mass.), Rep. Diana DeGette (D-Colo.) and I introduced the Empowered at Home Act.

The CLASS Act would create an insurance program to provide support, services and cash payouts for those who become functionally disabled. The Empowered at Home Act would give states incentives and greater opportunities to expand access to care at home and in the community. The CLASS Act is based on the principles of independence, free choice and empowerment. It builds on the promise and potential of the Americans with Disabilities Act, the law that helps bridge the divide between the disabled and their ability to function in society.

It would create a national insurance program financed through voluntary payroll deductions deposited in what we’ll term the National Independence Fund. The larger risk pool would allow expansive coverage at a modest cost. The benefits would be triggered when individuals become unable to perform two or more activities of daily living, such as eating, dressing and bathing. Aid would also be provided for equivalent cognitive disabilities, including Alzheimer’s, MS and traumatic brain injuries.

What can’t be measured among the benefits is the respect that is given and gained with a job, a home and a family. What can’t be added up are the contributions that the disabled make in their communities. What can’t be calculated is the dignity of self-reliance and independence.

As we work for historic health care reform in Washington, D.C., we should consider the creation of home care and assisted living to be the next logical step. It would be consistent with the same goals of the reform plan, and it would build on the productive change that is coming to the nation’s health care system. The time is right, and it is the right thing to do.

Rep. Frank Pallone (D-N.J.) is chairman of the Energy and Commerce Subcommittee on Health.