THE Gillard government has taken the first step towards creating a landmark national disability insurance scheme - but foreshadowed a long implementation time frame given its high cost.

The Productivity Commission has recommended the government adopt a national Medicare-style scheme providing insurance cover for Australians with a significant disability. The scheme would not be means-tested and would cost $6.5 billion a year.

The scheme would cover all kinds of services, from respite care, domestic help or community activities to accommodation support, therapies and aids, such as prosthetics or vehicle modifications.

Prime Minister Julia Gillard yesterday endorsed the fundamental policy shift - although she told reporters reform would be a ''long journey'' and the states would have to share responsibility.

The reform will be discussed with the premiers in Canberra on Friday next week.