Last updated 2026-07-25
TL;DR
Assisted living costs a median of $5,900 a month nationally as of 2024, with wide state variation from around $3,500 to over $8,000. Medicare does not pay for room and board in assisted living. Medicaid may help through state waiver programs, but eligibility and coverage vary by state and rarely cover the full cost.
What is assisted living?
Assisted living is a residential care setting for people who need help with daily activities like bathing, dressing, medication management, and meals, but who don't need the round-the-clock skilled nursing care a nursing home provides. Residents usually live in private or semi-private apartments or rooms and get help on an as-needed basis rather than continuous medical supervision. The federal government doesn't regulate assisted living directly. Each state licenses and defines it under its own statute, which is why the term covers everything from a converted single-family home with six beds to a 120-unit purpose-built community with a dining hall and activity director. The National Center for Health Statistics counted 28,900 residential care communities in the U.S. with 4 or more beds as of 2022, housing roughly 850,000 residents [1]. Because states write their own rules, the honest answer to "what is assisted living" always needs a second sentence: check your state licensing agency's definition before you build a budget or a business plan around it. A facility that calls itself assisted living in one state might be licensed as an adult care home, personal care home, or residential care facility for the elderly in another.
What is a group home?
A group home is a licensed residential setting, usually a house in a neighborhood, where a small number of residents (often 4 to 10, though state caps vary) live together and receive supervision, personal care, or behavioral support from paid staff. The term gets used across several populations: intellectual and developmental disabilities (IDD), mental health, substance use recovery, and adult foster care, in addition to assisted living for seniors. The regulatory home for a group home depends entirely on who lives there. A group home for adults with IDD is typically licensed under a state's developmental disabilities or Medicaid home and community-based services (HCBS) authority. A group home for seniors needing personal care may fall under the same license category as assisted living. This is the single most common confusion new operators run into: the word "group home" is a housing model, not a license type, and the cost structure and licensing path change based on which population and state agency you're dealing with. If you're comparing costs across facility types, start with our guide to assisted living to see how licensing categories map to cost drivers.
What is an assisted living facility?
An assisted living facility (ALF) is the licensed building or program itself, the physical address and the entity that holds the state license, as opposed to "assisted living" the general service model. States use varied statutory names: California calls them Residential Care Facilities for the Elderly (RCFE), Florida uses Assisted Living Facility as the actual legal term under Florida Statutes Chapter 429 [2], and Texas licenses Assisted Living Facilities under Texas Health and Safety Code Chapter 247 [3]. Most states set minimum staffing ratios, require a licensed administrator, mandate a certain square footage per resident, and require fire marshal sign-off before a facility can open. These requirements directly drive cost. A facility with a higher acuity resident population (memory care, for example) typically must staff at a richer ratio, and that labor cost gets passed to residents through higher monthly fees. For a detailed look at facility types by structure and size, see our overview of assisted living facilities and the smaller-scale model at facility assisted living.
What does assisted living cost, and what drives the price?
| Room type (shared vs private) | Shared rooms can cost 10-20% less than private units | |
|---|---|---|
| Geographic region | State medians range roughly $3,500 to over $8,000/month [4] | |
| Level of care / acuity | Memory care add-ons commonly run $1,000-$2,000/month more | |
| Staffing ratio required by state license | Higher-acuity licenses mandate more staff hours, raising base rent | |
| Included services vs. a la carte | Some states allow tiered billing for medication management, incontinence care, mobility assistance | Most facilities bill using a base rate plus a la carte care levels. A resident who only needs help with medication reminders costs less to serve than one needing two-person transfer assistance for every trip to the bathroom, and pricing usually reflects that tiering directly. A useful gut check for anyone comparing markets: Genworth's 2024 survey put the U.S. median annual cost of assisted living at $70,800 [4]. That's the number to anchor against when you see marketing materials claiming lower costs, since "starting at" prices almost never include care-level add-ons. |
The national median cost of assisted living was $5,900 a month in 2024, according to Genworth's Cost of Care Survey, which has tracked long-term care pricing since 2004 [4]. That's a median for a one-bedroom, private unit; costs run lower for shared rooms and considerably higher in high cost-of-living states and for memory care. Here's what actually moves the number, based on the categories Genworth and state cost-of-care studies track: | Cost driver | Typical impact |
How does assisted living compare to a nursing home?
Assisted living and nursing homes serve different needs, and the cost gap reflects that. Nursing homes (also called skilled nursing facilities) provide 24-hour skilled nursing care, are licensed under different federal and state rules tied to Medicare and Medicaid certification, and cost substantially more. Genworth's 2024 data put the median cost of a semi-private nursing home room at $9,277 a month and a private room at $10,646 a month [4], compared to $5,900 for assisted living. The practical difference: assisted living is for people who need help with activities of daily living but are medically stable. Nursing homes are for people who need ongoing medical treatment, wound care, IV therapy, or rehabilitation supervised by licensed nurses around the clock. CMS requires nursing homes to have a registered nurse on duty at least 8 consecutive hours a day, 7 days a week, and licensed nursing staff on duty 24 hours a day [5], a staffing floor that assisted living licenses generally don't impose in the same way. Because of that staffing and medical-oversight gap, nursing homes are far more likely to be at least partially covered by Medicare (for short-term, post-hospital skilled care) and Medicaid (for long-term custodial stays for people who qualify financially), while assisted living coverage is thinner and more state-dependent, which we cover below.
What does assisted living provide day to day?
Assisted living typically provides three meals a day, help with activities of daily living (bathing, dressing, grooming, toileting, transferring), medication management or reminders, housekeeping, laundry, transportation to appointments, social and recreational activities, and 24-hour staff availability for emergencies. What's included in the base rate versus billed separately varies enormously by state and by operator. Most state licensing statutes require, at minimum: a written service plan or care plan for each resident, staff trained in first aid and CPR, medication assistance (not administration, in states that draw that distinction), and an emergency call system. Beyond that floor, communities differentiate on amenities: dedicated memory care wings, physical and occupational therapy on-site, chef-prepared dining, and transportation fleets. One distinction that trips up families and new operators alike: assisted living is not a medical model. Most states prohibit ALFs from providing skilled nursing care beyond a defined scope, meaning residents who need ventilators, complex wound care, or IV medication administration usually have to move to a skilled nursing facility or bring in outside home health under a state's specific allowance for "negotiated risk" or hospice carve-outs. Check your state's statute for the exact scope of practice allowed under an assisted living license.
Does Medicare cover assisted living facilities?
No. Medicare does not cover the cost of room, board, or personal care in an assisted living facility. Medicare.gov states plainly that Medicare "doesn't cover long-term care (also called custodial care)" if that's the only kind of care a person needs [6], and assisted living is classified as custodial care, not skilled medical care. What Medicare will cover, even for someone living in assisted living, is medically necessary services delivered there or elsewhere: doctor visits, physical therapy following a qualifying hospital stay, durable medical equipment, and short-term skilled nursing care after a 3-day qualifying inpatient hospital stay (and even then, only in a certified skilled nursing facility, not an ALF) [6]. Medicare Part B can also cover some home health services delivered to someone who happens to live in an assisted living residence, but it does not pay the facility's monthly fee. This is one of the most consistently misunderstood facts in long-term care planning, and it drives a lot of the funding gap families face. If you're advising clients or building marketing copy, never suggest Medicare will cover the base rate; CMS and Medicare.gov are unambiguous on this point [6].
Does Medicaid pay for assisted living?
Sometimes, partially, and only if the state and the person both qualify. Unlike Medicare, Medicaid can cover services in assisted living, but almost always through a state's Home and Community-Based Services (HCBS) waiver program authorized under Section 1915(c) of the Social Security Act, not as a standard Medicaid state plan benefit [7]. Medicaid.gov explains that HCBS waivers let states "furnish an array of home and community-based services that assist Medicaid beneficiaries to live in the community" as an alternative to institutional care [7]. Critically, even where a waiver covers assisted living, it typically pays only for the care services (personal care, medication management, case management), not room and board. Residents or their families are generally still responsible for the room and board portion out of pocket, often paid from Supplemental Security Income or a state supplement. Eligibility is financial and functional: applicants must meet their state's income and asset limits for Medicaid long-term care eligibility (numbers vary by state and change annually) and meet a functional level of care requirement, usually the same standard used for nursing home level of care. Waiver slots are also frequently capped, meaning states maintain waiting lists even for people who qualify. If Medicaid funding is part of your business model, confirm current waiver availability, reimbursement rates, and any moratorium on new provider enrollment with your state Medicaid agency before you lock in a facility budget.
How do state cost variations break down?
Assisted living cost varies more by state and even by metro area than most other consumer services, because real estate, labor markets, and licensing staffing requirements all differ. Genworth's 2024 survey is organized by state and metro area precisely because a statewide average can mask huge swings, for example between a rural county and a state's largest city [4]. General cost drivers that explain most of the state-to-state gap: local minimum wage and healthcare worker wages (staffing is usually 50-65% of an operator's costs), commercial real estate and construction costs, state-mandated staffing ratios and training hour requirements, and local market saturation. States with high costs of living for healthcare workers (much of the Northeast and West Coast) tend to sit well above the $5,900 national median, while parts of the South and Midwest often sit below it. If you are researching a specific state's numbers for a business plan or a family budget, don't rely on national averages. Pull your state's specific figure from Genworth's published tool or from your state licensing agency's cost-of-care survey if it publishes one, and cross-check against at least two facilities actually operating in your target county.
How do I start a group home or assisted living business?
Starting a licensed group home or assisted living business is a multi-step regulatory process, not a single application. The core steps, which apply with variation across nearly every state, are: 1. Identify the population and license type you intend to serve (senior assisted living, IDD group home, mental health residential, adult foster care) and find the specific statute and licensing agency that governs it in your state. 2. Confirm zoning for the property. Many states protect group homes for people with disabilities from discriminatory zoning under the federal Fair Housing Act, but local zoning and occupancy codes still apply and vary by jurisdiction; confirm with your local planning department and your state licensing agency. 3. Complete any required administrator or operator training and certification (many states require a licensed administrator, sometimes with a specific coursework or exam requirement). 4. Submit the license application with required documents: floor plans, fire marshal approval, health department sign-off, background checks for staff and owners, proof of financial capacity, and a policy and procedure manual covering admissions, medication management, emergency preparedness, and resident rights. 5. Pass a pre-licensing inspection covering life safety, sanitation, and staffing readiness. 6. Maintain ongoing compliance: staff training hours, incident reporting, and periodic re-inspection, which vary by state but commonly happen annually or biennially. Every one of these steps is state-specific in its exact fee, timeline, and paperwork, so the honest answer to "how do I start a group home" is always "start with your specific state's licensing agency website and statute," not a generic checklist. Building your own binder of state-specific forms, sample policies, and staffing templates is the most time-consuming part of this process for new operators, which is the exact gap a resource like GroupHomePath's $299 State Group Home Licensing Kit is built to close, giving you a starting document set to adapt rather than build from a blank page. It doesn't replace legal review or guarantee approval, but it cuts the drafting time considerably. You can start building your state-specific packet at /licensing-kit-builder.
What's the difference between assisted living and nursing home costs long-term?
Over a multi-year stay, the cost gap between assisted living and nursing homes compounds fast. At Genworth's 2024 medians, a year of assisted living runs about $70,800, while a year of semi-private nursing home care runs about $111,324 and a private nursing home room runs about $127,750 [4]. Over three years, that's roughly a $170,000 difference between assisted living and a private nursing home room, before accounting for regional variation or annual cost increases. That gap is exactly why families and case managers try to keep someone in assisted living as long as safely possible, and why Medicaid HCBS waivers exist: they're explicitly designed as a lower-cost alternative to nursing home institutionalization, aimed at delaying or avoiding the far more expensive nursing home level of care [7]. For operators, this gap also explains market demand patterns: assisted living and memory care demand tends to grow as families try to avoid nursing home placement for as long as clinically appropriate, which is part of why the sector has grown steadily even as skilled nursing bed counts have been relatively flat in many states.
How should you budget for assisted living or plan a facility's rate structure?
For families budgeting for a loved one, start with the base rate for your target facility and region, then add a realistic care-level estimate. Ask every facility for their full rate sheet showing every care tier, more than the advertised "starting at" number, and ask specifically whether medication management, incontinence care, and mobility assistance are billed separately. Multiply the monthly total by 12 to compare against a Medicaid waiver's typical annual cap in your state, if applicable, and check whether your state Medicaid waiver has a waiting list; many do. For operators building a rate structure, work backward from your state's minimum staffing ratio and wage data for your county, add facility overhead (insurance, food, utilities, maintenance), and price your base rate to cover that fully loaded cost with margin before you add care-level tiers. A facility priced purely to match the local "average" without checking your actual labor cost is a common way new operators end up underwater in year one. Whether you're comparing your local market against senior assisted living facilities near me or benchmarking against smaller in-home models like assisted living at home, the same rule applies: cost data is only useful when it's specific to your state, county, and license type, not a national average.
Frequently asked questions
What is assisted living?
Assisted living is a licensed residential care setting for people who need help with daily activities like bathing, dressing, and medication management, but not full-time skilled nursing care. Each state defines and licenses it separately, so exact services, staffing, and terminology (RCFE, ALF, personal care home) vary by state. National median cost was $5,900/month in 2024, per Genworth's Cost of Care Survey.
What is a group home?
A group home is a licensed residential setting where a small number of residents live together with staff support, covering populations from seniors to people with IDD, mental health needs, or substance use recovery. It's a housing model, not one specific license type; the governing agency and cost structure depend entirely on which population the home serves and which state licenses it.
What is an assisted living facility?
An assisted living facility (ALF) is the licensed building and program that provides assisted living services. States use different legal names, such as California's Residential Care Facility for the Elderly (RCFE) or Florida's Assisted Living Facility under Florida Statutes Chapter 429. Each state sets its own staffing, training, and physical plant requirements for the license.
What is assisted living vs nursing home?
Assisted living serves people who are medically stable but need help with daily activities; nursing homes provide 24-hour skilled nursing care for people with ongoing medical needs. Nursing homes cost significantly more, with a 2024 median of $9,277/month for a semi-private room versus $5,900/month for assisted living, according to Genworth's Cost of Care Survey.
What does assisted living provide?
Assisted living typically provides meals, help with bathing/dressing/toileting, medication management, housekeeping, laundry, transportation, social activities, and 24-hour staff availability. It does not provide skilled nursing care like IV therapy or ventilator management; residents needing that level of medical care typically require a skilled nursing facility instead.
Does Medicare cover assisted living facilities?
No. Medicare does not cover room, board, or custodial personal care in assisted living. Medicare.gov confirms Medicare doesn't cover long-term custodial care. It may still cover medically necessary services like doctor visits or short-term skilled nursing after a qualifying hospital stay, but never the facility's monthly base rate.
How do I start a group home?
Identify your population and license type, confirm zoning with local and state authorities, complete required administrator training, submit a license application with floor plans and policy manuals, pass a pre-licensing inspection, and maintain ongoing compliance. Every step's specific fee, form, and timeline is set by your state licensing agency, so start there before drafting a business plan.
What is the difference between assisted living and nursing home costs?
Assisted living costs a median of $5,900/month nationally versus $9,277/month for a semi-private nursing home room and $10,646/month for a private room, per Genworth's 2024 survey. Over a year, that's roughly a $40,000 difference, and the gap widens further for private nursing home rooms.
Does Medicaid pay for assisted living?
Sometimes, through state Home and Community-Based Services (HCBS) waivers authorized under Section 1915(c) of the Social Security Act. These typically cover care services only, not room and board, and require meeting both income/asset limits and a nursing-home-level-of-care functional standard. Waiver slots are often capped with waiting lists.
How much does assisted living cost per month?
The national median was $5,900 a month in 2024, according to Genworth's Cost of Care Survey, but actual cost ranges roughly $3,500 to over $8,000 depending on state, room type, and level of care needed. Memory care and higher-acuity add-ons commonly increase the monthly total by $1,000 to $2,000.
What's the difference between a group home and assisted living facility?
Assisted living facility is typically the legal license category for senior residential care; group home is a broader housing model term used across populations including seniors, IDD, mental health, and recovery. A senior-focused group home may in fact be licensed as an assisted living facility, depending on the state's statute.
Can you use a reverse mortgage or long-term care insurance to pay for assisted living?
Long-term care insurance policies often do cover assisted living, depending on the specific policy's definitions and elimination period; check the policy document directly. Reverse mortgages can free up home equity to help pay privately, but that requires the homeowner to remain in the home, so it doesn't work once someone moves permanently into assisted living.
Sources
- CDC National Center for Health Statistics, Residential Care Community data: 28,900 residential care communities with 4+ beds housed roughly 850,000 residents in the U.S. as of 2022
- Florida Statutes Chapter 429, Assisted Living Facilities: Florida licenses assisted living facilities under Florida Statutes Chapter 429
- Texas Health and Safety Code Chapter 247, Assisted Living Facilities: Texas licenses Assisted Living Facilities under Health and Safety Code Chapter 247
- Genworth, Cost of Care Survey 2024: National median assisted living cost was $5,900/month in 2024; nursing home semi-private $9,277/month, private $10,646/month
- CMS, State Operations Manual Appendix PP, Nursing Home Staffing Requirements: CMS requires nursing homes to have licensed nursing staff on duty 24 hours a day and an RN on duty at least 8 consecutive hours daily
- Medicare.gov, Long-Term Care coverage information: Medicare does not cover long-term custodial care, including assisted living room and board
- Medicaid.gov, Home & Community-Based Services 1915(c) waivers: States use 1915(c) HCBS waivers to furnish home and community-based services as an alternative to institutional care, which can include assisted living services