Last updated 2026-07-25
TL;DR
Assisted living residential homes are licensed, home-like properties (usually a handful of beds) where seniors or adults with disabilities get help with bathing, meals, and medication, but not skilled nursing. Medicare does not pay for the room and board. Medicaid may help through state waiver programs, and licensing runs through your state's aging or health department, not the federal government.
What is assisted living?
Assisted living is a category of long-term care that sits between fully independent living and a nursing home. Residents get help with what the industry calls "activities of daily living," things like bathing, dressing, toileting, mobility, and medication reminders, while keeping their own room or apartment and a level of independence. It is not a hospital and it is not skilled nursing. There's no doctor on-site around the clock, and most states cap the amount of nursing care a facility can legally provide. The Centers for Medicare & Medicaid Services describes assisted living residences as places offering "housing and personal care services for people who need help with daily activities, but do not need the level of care provided in a nursing home" [1]. The term covers a lot of ground physically. It can mean a 120-bed building with a dining hall and activity director, or it can mean a 6-bed converted house on a residential street. Both are "assisted living" in common usage, but states license them differently and often under different rule chapters entirely.
What is a group home?
A group home is a small residential setting, usually a single-family house, where a limited number of unrelated people live together and receive supervision or care from staff. The population varies by state and by license type: some group homes serve adults with intellectual and developmental disabilities (IDD), some serve people in mental health recovery, some serve seniors, and some serve people transitioning out of the justice system. Size is the real difference from big-box assisted living. Most group homes run somewhere between 3 and 10 residents, though a handful of states allow larger "community residences." Because they're small and residential in character, group homes usually go through local zoning as a single-family use rather than a commercial one, at least under the federal Fair Housing Act's protections for people with disabilities living in community settings [2]. A senior-focused group home is often called a residential assisted living (RAL) home, adult foster care home, or adult family home depending on the state. An IDD-focused group home might be called an intermediate care facility (ICF/IID) or a community living arrangement. Same basic model, different licenses, different rulebooks. If you're comparing the group home model to the bigger facility model side by side, our assisted living facilities overview breaks down where each fits.
What is an assisted living facility?
An assisted living facility (ALF) is the licensed entity, the legal business, that provides room, board, supervision, and personal care to residents who need help with daily living but not hospital-level care. Every state has its own licensing category and its own name for it: Florida calls it an "assisted living facility" under Chapter 429 of its statutes [3], California calls the license a "Residential Care Facility for the Elderly" (RCFE) [4], Texas licenses "assisted living facilities" under its Health and Safety Code [5]. The legal definition matters because it sets the ceiling on what you're allowed to do. Most state statutes explicitly limit ALFs to "non-medical" or "custodial" care, meaning residents generally can't require 24-hour skilled nursing, ventilators, or complex wound care unless the state carves out an exception (some states allow "limited nursing services" add-on licenses). Every ALF license also comes with a staffing ratio requirement, a physical plant standard (fire sprinklers, exit widths, bedroom square footage), and a resident agreement requirement that spells out services, fees, and discharge criteria. If you want a state-by-state breakdown of what these licenses require, start with our assisted living facility guide.
What does assisted living provide, exactly?
Assisted living covers personal care, housing, meals, and social supervision, but the specific list is set by each state's licensing rules, not by a national standard. There is no federal minimum service list for assisted living the way there is for nursing homes under the Nursing Home Reform Act. Most state rules require, at minimum: three meals a day plus snacks, help with bathing and dressing, medication administration or reminders (the two are legally different and states regulate them differently), housekeeping and laundry, transportation to medical appointments, 24-hour staff awareness or supervision, and an emergency call system. Beyond that baseline, facilities vary wildly. Higher-end communities add memory care wings, physical therapy rooms, and full activity calendars. Smaller residential homes may offer a simpler package: private room, three meals, help with ADLs, and a shared living room. What assisted living does NOT typically provide, unless the state grants a special waiver or add-on license, is IV therapy, ventilator care, injections beyond what a nurse delegates, or continuous skilled nursing observation. That's the dividing line that keeps pulling residents (and their families) toward the next question.
What is the difference between assisted living and a nursing home?
| Medical staffing | No RN required 24/7 in most states | Licensed nurse on-site 24/7 required | |
|---|---|---|---|
| Regulator | State licensing agency | State health dept. + federal Medicare/Medicaid certification | |
| Typical setting | Apartment or private room, home-like | Hospital-like rooms, often shared | |
| Medicare coverage | Not covered (room & board) | Covered up to 100 days post-hospital stay under conditions [7] | |
| Medicaid coverage | Sometimes, via HCBS waiver | Yes, standard Medicaid benefit | People sometimes move from assisted living to a nursing home when their care needs escalate past what the ALF license allows. That's a real operational risk for operators too: your state will have a "negotiated risk" or involuntary discharge rule that spells out exactly when you must transfer a resident out. |
The core difference is medical intensity. Assisted living is personal care in a home-like or apartment-like setting; a nursing home (skilled nursing facility, or SNF) provides 24-hour medical care supervised by licensed nurses and often a physician, for people recovering from surgery, managing complex chronic illness, or needing rehabilitation. Nursing homes are certified under federal Medicare and Medicaid rules (42 CFR Part 483) and inspected against a detailed federal survey process [6]. Assisted living facilities are licensed entirely at the state level, there is no federal ALF certification, so the rules, inspection frequency, and even the terminology differ by state. | Feature | Assisted Living | Nursing Home (SNF) |
Does Medicare cover assisted living facilities?
No. Medicare does not pay for the room and board or personal care costs of assisted living. CMS states plainly that "Medicare doesn't cover long-term care (also called custodial care) if that's the only care you need" [7], and assisted living is generally classified as custodial care. Medicare Part A will cover a short-term stay in a skilled nursing facility, up to 100 days, but only after a qualifying 3-day inpatient hospital stay and only for skilled care related to that hospitalization, not for ongoing assisted living support [7]. Medicare Part B may still pay for a resident's doctor visits, physical therapy, or medical equipment even while they live in an assisted living facility, because those are medical services, not the housing itself. This surprises a lot of families and a lot of new operators too. If you're building a pro forma or a marketing page, don't imply Medicare will cover your monthly rate. It won't, and saying otherwise is the kind of claim that gets facilities in trouble with state consumer protection regulators.
How does Medicaid help pay for assisted living?
Medicaid can help pay for assisted living, but almost never through the standard Medicaid state plan. Most states use a Home and Community-Based Services (HCBS) waiver, authorized under Section 1915(c) of the Social Security Act, to pay for personal care and services in assisted living settings . Medicaid.gov describes HCBS waivers as allowing states to provide services "to beneficiaries in their homes and communities... as an alternative to institutional care" . Here's the catch operators and families both trip over: even when a state's Medicaid waiver covers the care component, it typically does NOT cover room and board. The resident (or their family, or a Supplemental Security Income check) still has to cover the rent portion. States handle this differently, some cap the room-and-board amount a facility can charge Medicaid waiver residents, some don't regulate it at all. Waiver slots are also limited and often have waiting lists, sometimes years long, because 1915(c) waivers are capped by enrollment number, unlike regular Medicaid which is an entitlement. If your business model depends on Medicaid waiver residents, check your state's waiver enrollment cap and current waitlist before you build a whole pro forma around it. Your state Medicaid agency or Aging and Disability Resource Center can tell you the real number.
How to start a group home (step by step)
Starting a group home is a licensing project first and a real estate project second. Skip the license research and you'll buy or lease a property that can't legally be used the way you planned. 1. Pick your population and license type. Senior residential care, IDD group home, mental health residential, and substance use recovery homes are usually licensed under separate chapters with different staffing and training rules. Decide this before anything else. 2. Confirm zoning first. Call your city or county planning department and ask directly whether a group home of your planned size is a permitted use in the zone you're considering. Many states protect small group homes for people with disabilities from discriminatory zoning under the Fair Housing Act [2], but occupancy limits, fire code, and business licensing still apply. Our zoning and property coverage runs through common trip-ups. 3. Get the property inspected against fire and building code before you sign a lease. Sprinklers, egress width, and bedroom square footage requirements are usually non-negotiable and expensive to retrofit. 4. Write your policy and procedure manual. States require written policies on medication management, emergency and disaster planning, resident rights, abuse reporting, admission and discharge criteria, and staff training. This document is usually the single biggest paperwork lift in the whole application. 5. Build your staffing plan. Confirm your state's minimum staff-to-resident ratio and required background check process (most states require an FBI fingerprint check plus a state abuse registry check for every staff member). 6. Submit the license application to your state licensing agency, along with the required fee (this varies by state, confirm with your state licensing agency for the current amount), floor plans, policy manual, and staffing plan. 7. Pass the pre-licensing inspection. A surveyor will walk the property checking fire safety, resident bedroom setups, kitchen sanitation, and your written policies against what's actually happening on the ground. 8. Get your license and start intake, following your state's admission agreement and disclosure requirements exactly, since these are usually the first thing an inspector reviews on your first renewal survey.
How do I start a group home if I've never run one before?
Most first-time operators underestimate the paperwork and overestimate the real estate. The property matters, but licensing agencies deny or delay far more applications over incomplete policy manuals and missing staff documentation than over the building itself. Start by requesting the actual application packet from your state licensing agency, not a summary from a blog or a franchise sales rep. Read the administrative code section by section (most states publish it as searchable text on the agency's website or through their state legislature's website). Note every place the rule says "policy required" or "written procedure required," because that's your manual's table of contents. Second, talk to your state's licensing surveyor office directly and ask what the most common citation is on first inspections in your category. Surveyors will usually tell you this over the phone; it's public information and they'd rather you fix it before the visit than fail because of it. Third, budget real time, more than money, for background checks. Fingerprint results and abuse-registry clearances can take anywhere from a few days to several weeks depending on your state and whether the FBI channel is backed up. Don't schedule a target opening date before every staff member's clearance is in hand. If you'd rather work from a structured template than build every policy and form from scratch, that's exactly the gap our $299 State Group Home Licensing Kit is built to close, it gives you a starting policy manual, staffing plan template, and state-specific application checklist so you're editing, not drafting from a blank page. Start at /licensing-kit-builder.
What's the difference between assisted living, memory care, and adult foster care?
Assisted living is the broad category described above. Memory care is a specialized license (or license add-on, depending on the state) specifically for residents with Alzheimer's or other dementias, usually requiring secured exits, higher staffing ratios, and dementia-specific staff training hours. Adult foster care (also called adult family homes in some states) is typically a smaller, home-based license, often capped at 5 or fewer residents, run out of a caregiver's own home rather than a purpose-built facility. The practical differences show up in staffing math and physical plant rules. Memory care staffing ratios are almost always richer than standard assisted living, because wandering, exit-seeking, and higher fall risk demand more direct supervision. Adult foster care homes usually have looser physical plant requirements than licensed ALFs (no requirement for a commercial kitchen, for example) precisely because they're capped so small and modeled on an actual family home. None of these categories are interchangeable on paper even when they look similar on the ground. A facility licensed only as "assisted living" that starts admitting residents who wander and need a locked unit, without a memory care add-on license, is operating outside its license and risking citation or closure.
What should families and operators know about inspections?
State licensing agencies inspect assisted living facilities and group homes on a regular cycle, commonly annually, sometimes every two years depending on the state and license type, plus complaint-triggered inspections that can happen any time. Inspectors check physical plant safety (fire alarms, sprinklers, egress), medication management logs, staff training and background check files, resident rights postings, and the facility's own required policies against what staff are actually doing. For operators, the fastest way to fail a survey is a mismatch between your written policy and your actual practice. If your medication policy says double-signature verification and the surveyor finds single-signature logs, that's a citation regardless of whether anyone was harmed. Keep your policy manual as a living document, update it when your practice changes, not the other way around. For families evaluating a facility, most states publish inspection reports online through the licensing agency's public search tool. Read the last two inspection reports before you tour, and ask the administrator directly about any repeat citations you see.
Frequently asked questions
What is assisted living?
Assisted living is licensed housing for people who need help with daily activities like bathing, dressing, and medication, but not the round-the-clock medical care of a nursing home. CMS defines it as care for people who "need help with daily activities, but do not need the level of care provided in a nursing home" [1].
What is a group home?
A group home is a small residential setting, usually a house, where a limited number of unrelated residents live together with staff supervision or care. Group homes serve different populations depending on license type: seniors, people with IDD, mental health recovery clients, or people in substance use recovery.
What is an assisted living facility?
An assisted living facility is the licensed business entity providing housing, meals, supervision, and personal (non-medical) care to residents. Every state defines and names this license differently, for example Florida's Chapter 429 ALF license [3] or California's RCFE license [4].
What is assisted living vs nursing home?
Assisted living provides personal care in a home-like setting with no required 24/7 nursing staff. A nursing home provides 24-hour skilled nursing care, is certified under federal Medicare/Medicaid rules [6], and serves people with higher medical acuity, like post-surgical recovery or complex chronic illness management.
What does assisted living provide?
Standard assisted living services include meals, help with bathing and dressing, medication reminders or administration, housekeeping, transportation to appointments, and 24-hour staff awareness. The exact required service list is set by each state's licensing code, not a federal standard, so it varies by state.
Does Medicare cover assisted living facilities?
No. Medicare does not cover the room, board, or personal care costs of assisted living because it classifies this as custodial care, not medical care [7]. Medicare Part B may still cover a resident's separate medical services, like doctor visits or physical therapy, even while they live in assisted living.
How do I start a group home?
Pick your resident population and license type, confirm zoning with your local planning department, get the property fire-code inspected, write your required policy manual, build a compliant staffing plan, and submit your application to your state licensing agency along with the required fee and floor plans.
How much does it cost to start a group home?
Costs vary enormously by state, property, and population served, driven by license fees, property retrofits (sprinklers, exits), and staffing. There's no single reliable national figure; confirm license and application fees directly with your state licensing agency before budgeting.
Is a group home the same as assisted living?
Not exactly. Assisted living is a broad care category; a group home usually refers to a smaller, home-based version of it, often licensed under a different chapter than large assisted living facilities, and sometimes serving IDD or mental health populations rather than only seniors.
Can Medicaid pay for assisted living?
Often, through a state's Home and Community-Based Services (HCBS) waiver under Section 1915(c) of the Social Security Act, which can cover personal care services in assisted living settings [8]. Room and board is usually excluded from waiver coverage and remains the resident's responsibility.
Do I need a nursing background to open a group home?
Most states do not require the owner or administrator to be a nurse, but many require a licensed administrator to complete a state-approved training or certification course before licensure. Requirements differ by state and by population served; confirm with your state licensing agency.
What's the difference between assisted living and memory care?
Memory care is a specialized license or license add-on for residents with dementia, requiring secured exits and higher staffing ratios than standard assisted living. Standard assisted living licenses typically do not allow admitting residents who wander or exit-seek unless the facility holds the memory care add-on.
How often are assisted living facilities inspected?
Most states inspect on an annual or biennial cycle, plus additional complaint-triggered inspections at any time. The exact frequency and process depends on your state's licensing agency; check your state's public inspection report database for actual facility history.
Sources
- Medicare.gov, Assisted Living Facilities: CMS description of assisted living as help with daily activities below nursing home level of care
- Florida Statutes Chapter 429, Assisted Living Facilities: Florida's assisted living facility license is created under Chapter 429
- California Dept. of Social Services, RCFE Program: California licenses assisted living as Residential Care Facilities for the Elderly (RCFE)
- Texas Health and Safety Code, Chapter 247: Texas licenses assisted living facilities under Health and Safety Code Chapter 247
- eCFR, Title 42 Part 483, Requirements for Long-Term Care Facilities: Nursing homes are federally certified and regulated under 42 CFR Part 483
- Medicare.gov, Long-Term Care: Medicare does not cover custodial long-term care and covers skilled nursing facility stays only up to 100 days under specific conditions
- Medicaid.gov, Home & Community-Based Services 1915(c): States use 1915(c) HCBS waivers to fund community-based care as an alternative to institutional care