Last updated 2026-07-25
TL;DR
Assisted living (sometimes marketed as "Project Caring Residential Assisted Living" or similar named homes) provides housing, meals, and help with daily activities like bathing and medication, but not skilled nursing. Nursing homes provide 24/7 medical care. Medicare does not cover assisted living room and board; Medicaid may help through state waivers. Starting one requires state licensing, zoning approval, staffing plans, and inspections.
What is assisted living?
Assisted living is a residential care option for people who need help with daily activities (bathing, dressing, medication reminders, meals) but don't need round-the-clock skilled nursing care. It sits between fully independent living and a nursing home on the care spectrum. The federal government doesn't run a single national assisted living program. Each state licenses and regulates assisted living under its own statute, often using different terms: "assisted living facility," "residential care facility," "personal care home," or "adult foster care." That's why you'll see names like "Project Caring Residential Assisted Living" attached to individual licensed homes rather than a national brand or category. If you're searching that specific name, you're likely looking for a particular local facility, not a type of care defined by federal law. CMS and the National Center for Health Statistics track these facilities under the broader label of "residential care communities." As of the most recent National Study of Long-Term Care Providers, there were an estimated 30,600 residential care communities in the United States with about 1,000,000 licensed beds [1]. That's the scale of the industry a new operator is entering. Most residents are older adults, but many states also license homes specifically for adults with intellectual or developmental disabilities, mental illness, or substance use recovery needs. If you're comparing paths, see assisted living facilities for how state definitions vary.
What is a group home?
A group home is a small residential setting, usually a single house, where a small number of unrelated residents live together and receive supervision, personal care, or support services from staff. Group homes serve seniors, adults with intellectual or developmental disabilities (IDD), people with mental illness, and people in addiction recovery, depending on the state license category. The defining features are scale and setting: typically 4 to 10 residents (though some states allow more), operating out of a home-like structure rather than an institutional building. Licensing requirements, staff ratios, and physical plant rules differ by population served and by state. "Group home" and "assisted living facility" overlap heavily in practice but aren't always the same license category. In some states, a small assisted living home for seniors and a group home for adults with disabilities fall under completely separate statutes, with different staffing rules, training hours, and inspection cycles. Always confirm with your state licensing agency which category applies to the population you plan to serve before you sign a lease or start renovations.
What is an assisted living facility?
An assisted living facility (ALF) is a state-licensed residential setting that provides housing, meals, supervision, and help with activities of daily living (ADLs) to people who can't safely live fully independently but don't need hospital-level or skilled nursing care. Typical services include help with bathing, dressing, toileting, mobility, medication management, housekeeping, laundry, and three meals a day. Many ALFs also offer social activities and transportation to medical appointments. Staff are usually direct care aides supervised by a licensed administrator, not registered nurses providing skilled treatment, though some states require a nurse on staff or on call for medication oversight. Size varies wildly. Some states license homes with as few as 3 to 6 beds (often called "residential care homes" or "adult foster homes"), while others license large communities with 100+ units. The National Center for Assisted Living reports the median assisted living community has around 33 units, though this varies by state licensing thresholds [2]. If you're building out policy manuals or comparing definitions across states, assisted living facility and facility assisted living break down state-specific terminology in more detail.
What does assisted living provide, day to day?
Assisted living provides a defined set of non-medical support services plus housing. On a typical day that means help getting up and dressed, medication reminders or administration (depending on state rules on who can administer medication), three meals plus snacks, housekeeping and laundry, and some level of organized activity or social programming. Most licenses require staff to be awake and present 24 hours a day, though the required staff-to-resident ratio during overnight hours is often lower than daytime. Many states require at least one staff member per facility around the clock, with additional staff scaled to resident count and acuity; the exact ratio is set in your state's administrative code and should be confirmed directly with your licensing agency. What assisted living does NOT typically provide: skilled nursing care, IV therapy, wound care beyond basic first aid, ventilator support, or complex medical monitoring. If a resident's needs exceed what the license allows, most states require the facility to either arrange additional in-home nursing services, transfer the resident to a higher level of care, or in some cases have the resident receive services through a Medicaid waiver that layers home health on top of the room and board. This layering is common and is a major funding pathway; see the Medicaid section below.
What is the difference between assisted living and a nursing home?
| License type | State residential care license | State + federal Medicare/Medicaid certification | |
|---|---|---|---|
| Medical staff | Aides, sometimes a nurse on call | RNs and LPNs required 24/7 | |
| Typical resident | Needs help with ADLs, mostly stable | Needs skilled nursing, rehab, or complex medical care | |
| Medicare coverage | Not covered for room/board | Covered up to 100 days per benefit period under specific conditions [3] | |
| Setting | Home-like, private or semi-private rooms | More clinical, hospital-adjacent design | |
| Typical monthly cost (2024 median, national) | $5,900 [4] | $9,733 (semi-private room) [4] | Both settings are regulated, but nursing homes carry federal survey requirements under 42 CFR Part 483 in addition to state licensing, because they participate in Medicare and Medicaid [5]. Assisted living facilities are regulated purely at the state level; there's no federal ALF certification. |
The core difference is the level of medical care and the license category under which each operates. Assisted living is a residential, non-medical model licensed to provide help with daily living activities. A nursing home (also called a skilled nursing facility, or SNF) is licensed to provide 24-hour skilled nursing and rehabilitative care ordered by a physician, and is certified to bill Medicare and Medicaid as a medical provider. | Feature | Assisted living | Nursing home (SNF) |
Does Medicare cover assisted living facilities?
No. Medicare does not cover the cost of room and board at an assisted living facility. CMS is explicit about this: Medicare Part A and Part B do not pay for long-term custodial care, including assisted living [6]. What Medicare will cover, even for someone living in assisted living, is medically necessary services delivered there: doctor visits, physical therapy ordered by a physician, durable medical equipment, and short-term skilled nursing care after a qualifying hospital stay (though that skilled nursing benefit is typically delivered in a certified SNF, not an ALF). Medicare Part D covers prescription drugs regardless of where someone lives. Medicaid is a different story. Most states offer a Home and Community-Based Services (HCBS) waiver under Section 1915(c) of the Social Security Act that can pay for personal care services, case management, and some support costs for people living in assisted living settings, though it typically does not pay for the room and board portion itself; residents cover that separately, often through Supplemental Security Income (SSI) or personal funds [7]. Some states also have state-funded assistance programs layered on top. Coverage rules, waiver waitlists, and eligible service lists differ significantly by state, so confirm current waiver availability with your state Medicaid agency before advising a family or building a business plan around it.
How do I start a group home?
Starting a group home involves five parallel tracks: choosing your population and license category, securing a compliant property, getting state licensure, building your staffing and policy infrastructure, and passing pre-opening inspections. None of these are sequential in practice; you'll be working several at once. Step 1: Pick your population and license type. A home for adults with IDD, a home for people in mental health recovery, and a senior assisted living home are usually licensed under completely different chapters of your state code, with different staff training hours, different physical plant rules, and different funding streams (Medicaid HCBS waiver vs. private pay vs. state mental health authority contracts). Get this right first; it drives every other decision. Step 2: Confirm zoning before you sign a lease. Many single-family residential zones allow small group homes (often 6 or fewer residents) as a matter of right under the Fair Housing Act's protections against discrimination toward people with disabilities, but larger homes or specific population types can still trigger conditional use permits, occupancy limits, fire code upgrades (sprinklers, egress width), and ADA accessibility requirements. Check with your local planning department, more than the state licensing agency. Step 3: Apply for your state license. This typically means submitting a business license application, a facility floor plan, a staffing plan, background checks (often FBI fingerprint-based) for owners and staff, proof of financial solvency, fire marshal sign-off, and a set of required policies (medication management, emergency preparedness, resident rights, grievance procedures). Application fees, timelines, and exact document lists vary enormously by state; confirm current requirements and fees with your state's licensing agency directly, since these change and are frequently updated. Step 4: Build your operations before day one. You need written policies covering admission and discharge criteria, medication administration, staff training (many states mandate specific hours in first aid, CPR, abuse reporting, and dementia care before hire and annually), incident reporting, and emergency evacuation plans. Inspectors will ask to see these in writing, more than hear that you "have a plan." Step 5: Pass your pre-licensing inspection. State surveyors typically walk the physical building (fire safety, accessibility, kitchen sanitation, bedroom square footage per resident) and review your paper files (staff credentials, policy manuals, resident records) before issuing your initial license. Expect a follow-up inspection cycle after opening, often annual or biennial depending on the state. If you want a structured way to organize all five tracks instead of assembling this from scratch, the $299 State Group Home Licensing Kit walks through state-specific document checklists, policy templates, and staffing plan formats so you're not starting with a blank page.
How do I start a group home for a specific population (IDD, mental health, or recovery)?
The mechanics are the same as senior assisted living, but the licensing agency and funding source usually differ. IDD group homes are often licensed through your state's developmental disabilities agency (sometimes jointly with the general health department) and funded heavily through Medicaid HCBS waivers for people with intellectual and developmental disabilities. Mental health group homes may be licensed through the state behavioral health authority. Recovery residences (sober living) sometimes fall outside traditional licensing altogether in states that instead rely on voluntary certification through organizations like the National Alliance for Recovery Residences (NARR), though a growing number of states have started requiring state certification or registration for recovery homes that want to bill Medicaid or receive referrals from state-funded treatment programs. Before you lease a building, call the specific state agency for your population, more than the general assisted living licensing board. Ask directly: what is the license category, what's the minimum staff-to-resident ratio for this population, what training must direct care staff complete before hire, and what's the current processing timeline for a new application. Get the answer in writing if you can; verbal guidance from a call center isn't something you can appeal to later. See populations served resources if you're deciding which population fits your background and local demand best.
What does zoning and property approval involve for a group home?
Zoning is where a lot of first-time operators get stuck, not licensing. Federal fair housing law generally requires that small group homes (commonly homes with 6 or fewer residents) be treated the same as any other single family residence in a residential zone, meaning cities generally can't ban them outright or require a special permit that ordinary families don't need . Once you exceed that small-home threshold, or if your state's definition of "family" for zoning purposes is different, local governments can require conditional use permits, special exceptions, spacing requirements between group homes, or additional parking. These rules vary city by city, more than state by state, so a property that works in one county may not work three miles away in a different jurisdiction. Physical plant requirements from the state licensing agency stack on top of zoning: minimum square footage per resident bedroom, number of bathrooms per resident, fire sprinkler and alarm requirements (often triggered by resident count or mobility status), accessible egress width, and kitchen commercial-grade requirements in larger homes. Get your fire marshal and state licensing surveyor to walk the property, or at minimum review the floor plan, before you sign a long-term lease. A property that looks perfect on paper can fail inspection over something as basic as bedroom door width or missing a second exit.
How much does it cost to start and license a group home?
There's no single number, and anyone who quotes you a flat national figure is guessing. Real costs break into four buckets: property (purchase or lease plus renovation to meet fire and accessibility code), licensing fees (application, background checks, inspection fees, which states publish on their licensing agency fee schedules), staffing (training costs, background checks, initial payroll before residents generate income), and working capital (insurance, initial supplies, marketing, and enough cash reserve to cover a slow fill-up period). For comparison on the demand side: the median national monthly cost for assisted living care in 2024 was $5,900, according to Genworth's Cost of Care Survey [4], which gives you a sense of what your local market may support in private-pay rates, though Medicaid waiver reimbursement rates run considerably lower and are set by your state, not the market. Don't skip a real cash flow model before you commit to a lease. Licensing timelines routinely run several months from application to approved opening in many states, during which you're paying rent, utilities, and possibly staff, with zero resident revenue.
What inspections should I expect after I'm licensed?
Expect an initial pre-licensing inspection, then a recurring inspection cycle, commonly annual, though some states inspect every 12 to 24 months depending on facility size, complaint history, and license type. Confirm the exact cycle with your state licensing agency, since it's set in state administrative code and varies. Inspectors typically check three things: the physical building (fire safety equipment, cleanliness, accessible egress, posted evacuation plans), staff files (current background checks, required training hours completed and documented, current CPR/first aid certification), and resident records (individual service plans, medication administration records, incident reports, evidence that grievances were logged and addressed). Complaint-driven inspections can happen at any time, triggered by a call from a family member, a mandated reporter, or an ombudsman. These are unannounced in most states. The best defense is a policy manual that actually matches what staff do day to day, because a mismatch between your written policy and observed practice is one of the most common citation triggers state surveyors report. See inspections resources for prep checklists by category.
Frequently asked questions
What is assisted living in simple terms?
Assisted living is housing plus help with daily activities like bathing, dressing, and medication, for people who need support but not full-time skilled nursing care. It's licensed at the state level, not federally, and services and staffing rules vary by state code.
What is a group home exactly?
A group home is a small residential setting, usually a house, where a limited number of unrelated residents live together and get supervision or support from staff. Group homes serve seniors, people with IDD, mental illness, or those in recovery, under state-specific license categories.
What is an assisted living facility (ALF)?
An assisted living facility is a state-licensed residence providing housing, meals, and help with activities of daily living for people who can't fully live independently but don't need skilled nursing. Size ranges from small 3 to 6 bed homes to communities with 100+ units, depending on state licensing rules.
What is the difference between assisted living and a nursing home?
Assisted living provides non-medical help with daily living in a home-like setting. A nursing home provides 24-hour skilled nursing care ordered by physicians and is certified under Medicare and Medicaid rules. Nursing home care costs more; the median 2024 semi-private room rate was $9,733 a month versus $5,900 for assisted living, per Genworth's Cost of Care Survey.
Does Medicare cover assisted living facilities?
No. Medicare does not pay for room and board at an assisted living facility because it's considered custodial, not medical, care. Medicare can still cover medically necessary services delivered there, like doctor visits or physical therapy, and covers short-term skilled nursing separately under specific hospital-stay conditions.
How do I start a group home?
Pick your population and license category, confirm zoning before signing a lease, apply for your state license with a floor plan and staffing plan, build written policies for medication, training, and emergencies, then pass your pre-licensing inspection. Confirm exact fees, timelines, and document lists with your state licensing agency.
How much does it cost to open a group home?
Costs vary by state and depend on property (purchase or renovation to meet fire code), licensing fees, staffing and background checks, and working capital to cover the months between application and full occupancy. There's no reliable flat national figure; confirm fee schedules with your specific state agency.
Does Medicaid pay for assisted living?
Many states offer Medicaid Home and Community-Based Services (HCBS) waivers under Section 1915(c) that cover personal care and support services in assisted living settings, but room and board is typically paid separately by the resident. Waiver availability, waitlists, and covered services differ by state.
What's the difference between a group home and an assisted living facility?
They overlap heavily but aren't always the same license. Group home often refers to smaller homes serving specific populations like IDD or mental health, while assisted living facility often refers to senior-focused licensed residences. The exact category, staff ratios, and training rules depend on your state's statute.
What training do group home staff need?
Requirements are set by state and vary by population served, but commonly include first aid, CPR, abuse and neglect reporting, medication administration (if applicable), and population-specific training like dementia care or crisis de-escalation. Hours required before hire and annually differ by state; confirm with your licensing agency.
How long does it take to get a group home license?
Timelines vary widely by state and license type, but the process from application submission to approved opening commonly runs several months, factoring in background checks, facility inspection scheduling, and document review cycles. Confirm current processing times directly with your state licensing agency.
Can a group home operate in a residential neighborhood?
Often yes. Federal fair housing protections generally require that small group homes, commonly those with 6 or fewer residents, be treated like any single-family residence for zoning purposes. Larger homes or certain population types may still need conditional use permits, so check local zoning rules before signing a lease.
What is assisted living vs. nursing home cost difference?
In 2024, the national median monthly cost for assisted living was $5,900, compared to $9,733 for a semi-private nursing home room, according to Genworth's Cost of Care Survey. Nursing homes cost more because they provide 24-hour skilled nursing staff and are certified to bill Medicare and Medicaid as medical providers.
Sources
- CDC National Center for Health Statistics, Long-Term Care Providers and Services Users: estimated number of residential care communities and licensed beds in the U.S.
- National Center for Assisted Living, Assisted Living State Regulatory Review: median size and unit count of assisted living communities
- Medicare.gov, Skilled Nursing Facility Care coverage: Medicare covers up to 100 days of skilled nursing facility care per benefit period under specific conditions
- Genworth, Cost of Care Survey 2024: median monthly cost of assisted living and nursing home semi-private room in 2024
- eCFR, 42 CFR Part 483 Requirements for States and Long Term Care Facilities: federal survey and certification requirements applicable to nursing homes participating in Medicare/Medicaid
- Medicare.gov, What Part A covers: Medicare does not cover long-term custodial care including assisted living room and board
- Medicaid.gov, Home & Community-Based Services 1915(c): states use 1915(c) HCBS waivers to cover personal care and support services for people living in assisted living settings