Last updated 2026-07-23
TL;DR
Assisted living services are licensed, non-medical help with daily activities like bathing, meals, and medication reminders, provided in a residential setting rather than a hospital-like nursing home. A group home is usually a smaller version of the same license category. Medicare doesn't pay for room and board; Medicaid sometimes covers the personal care piece through state waiver programs. Every rule, fee, and staffing ratio is set state by state.
What is assisted living?
Assisted living is a category of licensed residential care for adults, usually seniors, who need help with everyday tasks but don't need round-the-clock skilled nursing. Think help getting dressed, reminders to take medication, meals, housekeeping, and someone nearby if something goes wrong at 2 a.m. It's not a hospital and it's not meant to be one. The National Institute on Aging describes assisted living as housing that combines "housing, support services, and health care" for people who need help with daily activities but want to keep as much independence as possible. That's the honest core of it: independence plus a safety net, not medical treatment. There's no single federal definition. Every state licenses assisted living under its own rules, and the label on the building varies wildly: assisted living residence, residential care facility, personal care home, adult care home. If you're comparing options for a family member or scouting the industry as an operator, the name on the sign tells you less than the actual license category does. Always confirm with your state licensing agency which category a given building actually holds, because two buildings that look identical can be licensed very differently. According to the CDC's National Center for Health Statistics, the U.S. had roughly 28,900 residential care communities with about 811,500 licensed beds as of the mid-2010s, and that number has grown steadily since [1]. It's a large, fragmented industry made up mostly of small operators, not a handful of national chains.
What is a group home?
A group home is a small residential setting, typically 4 to 10 residents, where people live together and receive supervision and support tailored to a specific population: seniors, adults with intellectual or developmental disabilities, people in mental health recovery, or people in addiction recovery. It's smaller and more home-like than a large assisted living building, and it's often licensed under a different state statute even when the day-to-day care looks similar. Here's the confusing part: in many states, a small group home for seniors is legally a type of assisted living facility, just capped at a lower resident count. In other states, group homes serving people with disabilities are licensed through the state's developmental disabilities or behavioral health agency instead of the aging or health department. The federal government doesn't standardize this, and a 2015 compendium from the U.S. Department of Health and Human Services found enormous variation in how states define, size-cap, and regulate these settings. So when someone asks "is a group home the same as assisted living," the honest answer is: sometimes, depending on your state's licensing categories. Read assisted living facility definitions for your specific state before you assume anything based on another state's rules.
What is an assisted living facility?
An assisted living facility (sometimes just called an ALF) is the licensed building or program itself, the entity that holds the state license, gets inspected, and is legally responsible for resident care. It combines a private or semi-private living space with services: personal care, meals, medication management or reminders (the exact scope depends on your state's nurse delegation and medication rules), housekeeping, and staff supervision. What makes it a "facility" in the legal sense is the license itself, issued by a state health department, department of aging, or department of social/human services depending on the state. Facilities are inspected on a schedule (often annually, sometimes every two years, plus complaint-driven visits) and must maintain things like fire safety compliance, staffing plans, and resident care policies. Size varies enormously, from a converted single-family home with 6 beds to a purpose-built campus with 150 units. Larger buildings sometimes hold a tiered license that lets them serve residents with higher needs (memory care, for example) under a separate add-on certification. Smaller operators, especially first-timers, usually start with the base-level license and add specialty endorsements later. Look at assisted living facilities licensing pages state by state before assuming your local rules match a neighboring state's.
What does assisted living provide, day to day?
Most assisted living licenses cover a similar core bundle of services, though the exact list and the staff qualifications required to deliver each item differ by state. Typical daily services include: help with bathing, dressing, grooming, and toileting; medication reminders or, in states that allow it, medication administration by trained staff; three meals a day plus snacks; laundry and housekeeping; social and recreational activities; transportation to appointments; and staff supervision, usually 24 hours a day even if that staff isn't awake overnight in every state. What it generally does not provide is skilled nursing care: IV therapy, wound care beyond basic first aid, ventilator support, or the kind of clinical monitoring you'd get after surgery. If a resident's needs cross that line, most states require the facility to either arrange a higher level of licensed care or discharge the resident to a nursing home, an assessment usually driven by the resident's care plan and a nurse or physician evaluation. The National Institute on Aging frames it simply: assisted living is meant for people who "need help with daily activities but don't need the level of care a nursing home provides". That line, help with daily living versus skilled medical care, is the dividing line the entire industry is built around.
Assisted living vs. nursing home: what's the real difference?
| Level of care | Non-medical personal care | Skilled nursing, 24/7 | |
|---|---|---|---|
| RN staffing | Set by state, varies widely | Federal minimum: RN 8 hrs/day, 7 days/week | |
| Licensing agency | State (varies by name) | State + CMS certification for Medicare/Medicaid billing | |
| Typical resident need | Help with ADLs, supervision | Post-hospital rehab, chronic medical conditions | |
| Median monthly cost, 2023 | $5,350 [2] | $8,669 (semi-private), $9,733 (private) [2] | Cost follows care level pretty predictably: more nursing staff and clinical equipment costs more. Genworth's 2023 Cost of Care Survey put the national median assisted living facility cost at $5,350 a month, compared with $8,669 for a semi-private nursing home room and $9,733 for a private room [2]. Those are national medians; your state and even your county can swing 30 to 50 percent in either direction. |
The core difference is medical intensity. Assisted living is personal care and supervision in a residential setting. A nursing home (also called a skilled nursing facility) provides 24-hour licensed nursing care for people who need ongoing medical treatment, rehabilitation after a hospital stay, or management of complex chronic conditions. Federal law backs this up directly for nursing homes. Under 42 CFR 483.35(b)(1), a skilled nursing facility "must use the services of a registered nurse for at least eight consecutive hours a day, seven days a week," plus licensed nursing staff around the clock. Assisted living facilities have no equivalent federal nurse-staffing floor; staffing minimums, if any, are set entirely at the state level, and many states don't require an RN on-site at all. | | Assisted Living | Nursing Home |
Does Medicare cover assisted living facilities?
No. Medicare does not pay for room and board, personal care, or custodial supervision in an assisted living facility, and it never has. Medicare.gov is direct about this: long-term custodial care, the kind assisted living mainly provides, is excluded from coverage. What Medicare will cover, even for someone living in assisted living, is medically necessary care delivered there: doctor visits, physical or occupational therapy ordered by a physician, durable medical equipment, and home health services under Part B if the person qualifies. Medicare Part A can cover a short skilled nursing facility stay after a qualifying hospital admission, but that's a nursing home benefit, not an assisted living benefit, and it's capped (typically up to 100 days per benefit period, with a copay kicking in after day 20). Families often assume Medicare will step in once savings run out. It won't, for assisted living specifically. That gap is exactly why Medicaid waiver programs and long-term care insurance exist, and why so many families end up paying privately for a period before qualifying for other help.
Does Medicaid cover assisted living services?
Sometimes, but not the way most people expect. Medicaid, as a rule, does not pay for room and board in a residential setting. What many states do instead is use Home and Community-Based Services (HCBS) waivers, typically authorized under Section 1915(c) of the Social Security Act, to pay for the personal care and supportive services piece, while the resident (or their family) still pays room and board separately. Medicaid.gov describes the purpose of these waivers plainly: "Home and Community-Based Services (HCBS) provide opportunities for Medicaid beneficiaries to receive services in their own home or community rather than institutions or other isolated settings". Assisted living qualifies as "community" under many of these waivers, which is why HCBS coverage of assisted living services has grown a lot over the past two decades. Eligibility, covered services, waiver waitlists, and reimbursement rates are entirely state-specific, and some states cap the number of HCBS slots, which creates real waitlists. If you're an operator hoping to accept Medicaid residents, you'll need a separate Medicaid provider enrollment process on top of your state operating license, and you should confirm current waiver capacity with your state Medicaid agency before you build a business plan around it.
How do I start a group home?
Starting a group home means becoming a licensed operator under your state's specific residential care category, and the steps are broadly similar across states even though the paperwork and terminology differ. First, identify the exact license category you need. "Group home" isn't one national license; it might fall under aging services, developmental disabilities, behavioral health, or general assisted living statutes depending on who you plan to serve. Second, confirm zoning. Residential care uses are treated differently from ordinary single-family homes in many municipalities, and you'll want a zoning determination in writing before you sign a lease or close on a property. Third, write your policy and procedure manual: admissions criteria, medication management, emergency procedures, resident rights, incident reporting, and staff training protocols. Licensing agencies review this document closely, and a thin or generic manual is one of the most common reasons applications stall. Fourth, build a staffing plan that meets your state's minimum ratios and qualification requirements (more on that below). Fifth, pass your fire marshal and health department inspections, which usually happen before your license is issued, not after. Sixth, submit your license application with all required attachments: floor plans, staffing plan, policies, background check clearances, and proof of insurance. A lot of first-time operators underestimate how much of this is paperwork, not construction. Building a clean, state-specific policy manual and staffing plan from scratch can eat weeks of unpaid time, which is the exact gap GroupHomePath's $299 State Group Home Licensing Kit is built to close, giving you a state-matched starting template instead of a blank page. You can build one at /licensing-kit-builder. But the kit doesn't replace talking directly to your state licensing agency; it just gets you to that conversation with real documents in hand instead of guesses.
What staffing and training does an assisted living or group home need?
Staffing rules vary more state to state in this industry than almost any other regulatory detail, which is exactly why the National Center for Assisted Living publishes an annual state-by-state regulatory review comparing minimum staff-to-resident ratios, training hour requirements, and administrator licensing rules across all 50 states. Most states require some combination of the following: a licensed administrator or manager who has completed state-approved training and passed a competency exam; direct care staff who complete initial orientation (often 8 to 40 hours depending on the state) plus annual continuing education; medication aide certification for any staff handling medication administration, more than reminders; and CPR/first aid certification for staff on shift. Background checks, usually a state criminal history check and sometimes a federal fingerprint check, are close to universal. Staff-to-resident ratios are often not written as a hard number at all; many states instead require "sufficient staff to meet resident needs" and leave the specific number to the facility's staffing plan, subject to inspector approval. That flexibility cuts both ways: it lets a small group home run leaner than a 100-bed facility, but it also means your staffing plan needs to hold up under a surveyor's scrutiny, more than meet a minimum on paper.
What does licensing and inspection actually look like?
Licensing typically runs through several stages: pre-application consultation with your state agency, submission of your application and supporting documents, a plan review (especially for building and fire safety), an initial licensing survey or inspection of the physical space and your operating systems, and finally license issuance if you pass. Timelines vary a lot. Some states can move a straightforward, small-home application through in a couple of months; others, especially for larger facilities or ones requiring extensive construction, take six months to a year. Nobody publishes a reliable national average because it depends so heavily on your state's staffing and your building's readiness, so treat any "guaranteed fast approval" claim you hear from a consultant with real skepticism. Once licensed, expect a recurring inspection cycle, commonly annual or biennial, plus unannounced inspections triggered by complaints. Inspectors typically check life safety (smoke detectors, exits, sprinkler systems where required), medication storage and administration records, staff training files, resident care plans, and general sanitation. The HHS compendium on state assisted living regulation notes just how much this inspection cadence and scope differs by state, which is a big part of why a licensing checklist that works in one state can be dangerously incomplete in another. Confirm your specific inspection schedule and checklist with your state licensing agency directly.
What does it cost to start and run a group home or assisted living facility?
Startup costs swing enormously based on whether you're buying or leasing property, how much renovation your building needs for fire code and accessibility, and how many residents you plan to serve. Rough cost buckets to plan for: property acquisition or lease deposit, renovation and life-safety upgrades (sprinklers, exits, accessible bathrooms), licensing and inspection fees (these vary by state, confirm exact amounts with your state licensing agency), liability and property insurance, initial staffing and training costs before your first resident even moves in, and working capital to cover several months of operating expenses before revenue stabilizes. The Small Business Administration's general guidance on licenses and permits is a decent starting checklist for the business side (business license, EIN, state tax registration), separate from your health-specific care license. Don't skip either track; you generally need both a standard business registration and your specialized care license to operate legally. Ongoing costs are dominated by payroll, since staffing ratios in this industry mean labor is almost always the largest recurring expense, followed by food, utilities, insurance, and compliance costs like required continuing education. If you're building a budget from scratch, a state-specific licensing kit (GroupHomePath sells one for $299 at /licensing-kit-builder) can shortcut the policy-manual and staffing-plan drafting work, but it won't tell you your state's exact fee schedule; that number only comes from your state licensing agency's current fee table.
Frequently asked questions
What is assisted living?
Assisted living is licensed residential care for adults who need help with daily activities like bathing, dressing, and medication reminders, but who don't need 24-hour skilled nursing. It combines housing with personal care services, typically in a home-like or apartment-style setting, and is regulated by state agencies rather than one federal standard.
What is a group home?
A group home is a small residential care setting, usually housing 4 to 10 people, that provides supervision and daily living support for a specific population such as seniors, people with intellectual or developmental disabilities, or people in mental health or recovery care. Licensing category and agency depend on the population served and vary by state.
What is an assisted living facility?
An assisted living facility is the licensed building or program that provides room, meals, and personal care services (bathing, dressing, medication support) to residents who need daily assistance but not skilled nursing care. It's inspected on a regular schedule by the state agency that issued its license.
What is the difference between assisted living and nursing home care?
Assisted living provides non-medical help with daily activities in a residential setting, with staffing levels set by each state. A nursing home provides 24-hour skilled nursing care, and federal rule 42 CFR 483.35 requires nursing homes to staff an RN at least eight consecutive hours a day, seven days a week, a standard assisted living has no federal equivalent of.
What does assisted living provide?
It typically covers help with bathing, dressing, grooming, and toileting; medication reminders or administration depending on state rules; meals; housekeeping and laundry; social activities; transportation; and staff supervision. It does not provide skilled nursing services like IV therapy or complex wound care.
Does Medicare cover assisted living facilities?
No. Medicare does not pay for room, board, or custodial personal care in an assisted living facility. It may cover medically necessary services delivered there, like doctor visits or physical therapy under Part B, and it can cover a short skilled nursing facility stay after a qualifying hospitalization under Part A, but that's a different setting entirely.
Does Medicaid cover assisted living services?
Medicaid generally does not pay room and board in assisted living, but most states use Home and Community-Based Services (HCBS) waivers under Section 1915(c) of the Social Security Act to cover the personal care services portion. Coverage, eligibility, and waitlists vary widely by state; confirm current rules with your state Medicaid agency.
How do I start a group home?
Identify your state's specific license category for the population you plan to serve, confirm zoning approval, write your policy and procedure manual, build a compliant staffing plan, pass fire and health inspections, and submit your license application with all required documents. Expect the process to take anywhere from a few months to about a year.
How much does assisted living cost per month?
Genworth's 2023 Cost of Care Survey put the national median at $5,350 a month for assisted living, compared with $8,669 for a semi-private nursing home room and $9,733 for a private nursing home room. Actual costs swing significantly by state, city, and level of care needed.
How many residents can a group home have?
There's no single national number. Many states cap small group homes at 4 to 10 residents under specific license categories, while larger assisted living facilities can hold licenses for dozens or even hundreds of residents. The exact cap depends on your state's licensing category and building code classification.
Do I need a license to run a group home from my house?
Yes, in essentially every state, providing paid residential care to non-family members requires a state license, even in a converted single-family home. Operating without one risks fines, forced closure, and in some states criminal penalties. Confirm the exact licensing category and threshold with your state licensing agency before accepting residents.
Is a group home the same thing as an assisted living facility?
Often, yes, in the sense that small group homes for seniors are frequently licensed under the same assisted living statute as larger facilities, just with a lower resident cap. Group homes serving people with disabilities or mental health needs, though, are sometimes licensed under entirely separate state agencies.
Sources
- CDC National Center for Health Statistics, National Study of Long-Term Care Providers: About 28,900 residential care communities with roughly 811,500 licensed beds in the U.S.
- eCFR, Title 42 Part 483.35(b)(1), Nursing Services Requirement: Federal requirement for RN coverage at least 8 consecutive hours a day, 7 days a week in skilled nursing facilities
- Medicaid.gov: Medicaid covers home and community-based services, which can include some assisted living services under HCBS waivers
- Medicare.gov: Medicare does not cover long-term care costs such as room and board in assisted living facilities
- eCFR: Federal regulations under 42 CFR Part 483 govern requirements for long-term care facilities, including nursing homes
- Medicaid.gov: States can use Medicaid HCBS waivers (like 1915(c)) to cover certain assisted living-related services
- National Institute on Aging (NIH): NIA provides guidance on what assisted living is and what daily services it typically provides