Last updated 2026-07-23
TL;DR
Residential care homes near you fall into a few legal categories: assisted living, group homes (adult foster care), and nursing homes, each licensed and defined differently by state. Assisted living helps with daily activities in a home-like setting; nursing homes provide medical/skilled care. Medicare doesn't cover ongoing assisted living costs, but Medicaid waivers sometimes do. National median assisted living cost was $5,350/month in 2023 [7].
What is assisted living, and what is an assisted living facility?
Assisted living is a type of housing for people who need help with daily tasks like bathing, dressing, medication reminders, or meals, but who don't need round-the-clock medical care. An assisted living facility is the physical building and licensed program that provides that help, usually set up more like an apartment or a home than a hospital. The National Institute on Aging describes this level of care as a middle ground between living fully independently and needing a nursing home. Residents typically have their own room or apartment, share common spaces, and get support from staff who are trained but usually not nurses or doctors on site around the clock. Every state licenses assisted living differently, and the name varies too. Some states call it "assisted living," others use "residential care facility for the elderly," "personal care home," or "adult care home." If you're researching a specific assisted living facility near you, always confirm its exact license category and inspection history with your state's licensing agency rather than relying on the marketing name on the building. Most assisted living communities are private-pay first, meaning residents or their families cover the monthly rate directly, though some states allow Medicaid waiver dollars to help cover services (not room and board) for people who qualify.
What is a group home?
A group home is a licensed residential setting, usually a single-family style house, where a small number of people (often somewhere between three and ten, depending on your state's rules) live together and receive supervision, personal care, or behavioral support from staff. Group homes serve very different populations: adults with intellectual or developmental disabilities, people in mental health recovery, seniors who need adult foster care, or people in substance use recovery. Unlike a big assisted living building with dozens of residents, a group home usually looks like an ordinary house on an ordinary street. That's often the point. It's meant to feel like a home, not an institution, and many state licensing rules are written specifically to keep the environment small and home-like. Group homes are licensed under a different statute than assisted living in most states, sometimes through the state's department of health, sometimes through developmental disabilities or behavioral health agencies. This matters a lot if you're trying to open one: the application, staffing ratios, and inspection checklist for a group home serving adults with disabilities can look nothing like the checklist for a senior assisted living license, even in the same state. If you're comparing options for a family member or exploring assisted living at home models, it helps to ask directly which license category a facility holds and what agency inspects it, because that answer tells you what rules it's actually required to follow.
What's the difference between assisted living and a nursing home?
Assisted living is for people who need help with daily activities but not ongoing medical or skilled nursing care, while a nursing home (also called a skilled nursing facility) is for people who need daily medical supervision, rehabilitation, or care from licensed nurses. The NIA frames this as a spectrum: independent living, assisted living, and then skilled nursing as needs increase. Nursing homes are certified by Medicare and Medicaid and must meet federal requirements under 42 CFR Part 483, which cover things like registered nurse coverage, resident assessments, and quality of care standards. Assisted living facilities are licensed at the state level only. There's no federal assisted living certification, which is part of why quality and staffing rules for assisted living vary so much from state to state. A practical way to think about it: if someone needs a nurse checking blood pressure or other health readings multiple times a day, wound care, IV medication, or rehab therapy after a hospital stay, that's nursing home territory. If someone mainly needs reminders, help getting dressed, meal prep, and some social supervision, assisted living or a group home setting usually fits. CMS's Care Compare tool lets you look up Medicare-certified nursing homes and their inspection results by name or location, but it does not include assisted living communities or most group homes, since those aren't federally certified programs.
What does assisted living actually provide day to day?
Assisted living typically provides a private or shared room, meals, help with bathing and dressing, medication reminders, housekeeping, laundry, transportation to appointments, and some organized social activities. Staff are on site to help but generally aren't providing medical treatment. Most states require a written service plan for each resident, updated periodically, that spells out exactly what help they need and how often. This plan usually gets reviewed at each inspection, so it's more than paperwork; it's the document regulators check against what's actually happening in the building. What's not typically included: skilled nursing care, physical therapy, or complex medical treatment. If a resident's needs increase past what the facility is licensed to provide, most states require the facility to either bring in additional licensed services or help the resident transition to a higher level of care, like a nursing home. Costs and included services vary a lot by state and by building. A community advertising "all-inclusive" pricing might bundle everything above into one monthly rate, while another charges a base rate plus add-ons for each level of care a resident needs. Always ask for the fee schedule in writing before assuming what's covered, and compare it against a few other assisted living facilities in your area.
Does Medicare cover assisted living facilities?
No. Medicare does not pay for the ongoing cost of living in an assisted living facility. Medicare's own guidance is direct about this: "Medicare doesn't cover long-term care (also called custodial care) if that's the only care you need" [1]. Room and board, help with bathing and dressing, and general supervision all count as custodial care, which falls outside Medicare's coverage. What Medicare will cover, even for someone living in assisted living, is medical care that's otherwise covered under Parts A and B: doctor visits, some home health services if a person qualifies, durable medical equipment, and short-term skilled nursing care after a qualifying hospital stay (in a nursing facility, not in assisted living). Medicaid is a different story. Medicaid can pay for some assisted living or group home services through Home and Community-Based Services (HCBS) waivers, which CMS describes this way: "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" [2]. Even then, Medicaid waivers generally cover care services, not the room and board portion of the bill, and availability depends heavily on your state's specific waiver programs and waiting lists. Veterans may also have access to VA Aid and Attendance benefits to help offset assisted living costs, and long-term care insurance, if someone purchased a policy years earlier, can help too. But for most families, private pay covers the bulk of assisted living costs until Medicaid eligibility kicks in, if it applies at all.
How do I find residential care homes near me?
Start with your state's licensing agency, not a general search engine, because that's the only source that tells you whether a facility is currently licensed, what violations it has on record, and what category it's licensed under. Nearly every state publishes a searchable facility database; California's Community Care Licensing Division, for example, maintains a public online lookup for residential care facilities [3]. Confirm with your state licensing agency what the equivalent tool is called where you live. The federal Eldercare Locator, run by the Administration for Community Living, is a good starting point if you don't know which state agency to check first. It connects people to local Area Agencies on Aging and community resources, including residential care options. Once you have a short list, call and ask directly: what's your current license status, when was your last inspection, and can I see the most recent inspection report? Most states require these reports to be available to the public on request, and many post them online already. Visit in person if you can, at more than one time of day. A building that looks great during a scheduled tour at 10am can feel very different during a rushed dinner service at 5:30pm. Ask current family members of residents about staff turnover, how call lights get answered, and how often the facility changes the resident's care plan without much notice. If you're specifically researching senior assisted living facilities near me, cross-reference online reviews against the actual state inspection file, because reviews and regulatory history don't always tell the same story.
How much do residential care homes and assisted living cost?
| Adult day health care | $2,150 | Private pay, some Medicaid waivers | |
|---|---|---|---|
| Assisted living facility | $5,350 | Private pay, Medicaid HCBS waiver in some states, VA benefits | |
| Home health aide (in-home) | $6,292 | Private pay, Medicaid HCBS, long-term care insurance | |
| Nursing home, semi-private room | $8,669 | Medicare (short-term skilled care only), Medicaid, private pay | |
| Nursing home, private room | $9,733 | Medicare (short-term skilled care only), Medicaid, private pay | Source: Genworth Cost of Care Survey, 2023 These are national medians, and they hide a huge range. A rural adult foster care home might run well under $3,000 a month for room, board, and supervision, while a memory care unit in a high cost-of-living metro area can run past $8,000. Group homes serving adults with developmental disabilities are often funded very differently, through a state's Medicaid waiver and per-diem rate system rather than straight private pay, so "cost" for a family often looks more like an eligibility and waitlist question than a sticker price. |
National median costs vary a lot by care type and by state, but Genworth's Cost of Care Survey gives a useful national benchmark. As of the 2023 survey, the national median monthly cost for assisted living was $5,350, compared to $9,733 for a private room in a nursing home. | Care type | National median monthly cost (2023) | Typical payer |
How do I start a group home?
Starting a group home means working through four tracks at roughly the same time: business formation, state licensing, property and zoning, and staffing. Skipping any one of them tends to cause the delays operators complain about most. First, form your business entity (most operators use an LLC) and get an EIN, following the same basic steps the Small Business Administration outlines for any new small business: choose a structure, register it, get your tax ID, and check what local business licenses apply. Second, identify which state agency licenses the population you plan to serve, since adult foster care, IDD group homes, mental health residential programs, and senior assisted living are often licensed by completely different departments even within the same state. Confirm with your state licensing agency which category matches your plan before you write a single policy. Third, line up your property. Zoning is where a lot of first-time operators get stuck, because a house that's zoned for single-family residential use doesn't automatically allow a licensed group home. Many states and the federal Fair Housing Act protect group homes for people with disabilities from zoning rules designed to exclude them, but the legal argument only works if your license and use actually qualify, and local disputes still happen often enough that you shouldn't assume it away. Fourth, build your staffing plan and policy and procedures manual before you apply, not after. Licensing reviewers want to see written policies on medication management, emergency procedures, staffing ratios by shift, and background check compliance, and most states require these documents as part of the initial application packet, not as an afterthought. This is exactly the paperwork stack that trips up new operators, and it's why GroupHomePath built the $299 State Group Home Licensing Kit: state-specific application checklists, policy manual templates, and staffing plan worksheets in one place, so you're not reverse-engineering your state's requirements from scratch. You can start building yours at /licensing-kit-builder.
What licensing, staffing, and inspection steps should I expect as an operator?
Most states run the licensing process in a similar sequence, even though the specific forms and fee amounts differ: pre-application orientation or consultation, submission of the license application with your policies and floor plan, a fire and life safety inspection, a health and sanitation inspection, background checks for owners and staff, and then a pre-licensing site visit before your license is issued. Confirm with your state licensing agency the exact order and fee amounts, since these change and vary widely by state and by facility size. Staffing plans usually need to show coverage by shift, more than total headcount. A reviewer wants to see who's on duty at 2am, more than that you employ enough people across a week. Most states also require a designated administrator or licensee who meets specific training or experience requirements, plus documented staff training on topics like medication administration, abuse reporting, and emergency evacuation. Once licensed, expect ongoing inspections, often unannounced, at a frequency your state sets (commonly annual, sometimes more often after a complaint or violation). Inspectors typically check your resident files, medication logs, staffing schedules against your posted plan, building safety features like fire extinguishers and exits, and your policy manual against what's actually happening on the ground. Facilities that keep organized, current documentation tend to have shorter, less stressful inspection visits than those scrambling to produce records on the spot.
What zoning and property issues affect residential care homes?
Zoning determines whether your property can legally operate as a licensed residential care home in the first place, and it's one of the most common reasons a promising location falls through before licensing even starts. Single-family residential zones sometimes restrict occupancy or prohibit "institutional" uses, and a group home can get caught in that definition depending on local code. The federal Fair Housing Act protects people with disabilities from housing discrimination, and HUD's guidance addresses how this applies to group homes when local governments try to use zoning to block or restrict them. That protection is real, but it isn't a shortcut around your state's licensing requirements, and it doesn't override legitimate, evenly applied building and fire codes. Local disputes over group home zoning still happen, and they can take months to resolve through variance hearings or legal challenges. Beyond zoning, look closely at building code requirements for your specific facility type: number of exits, sprinkler requirements above a certain occupancy, ADA accessibility if you're serving people with mobility limitations, and separation requirements between bedrooms if you're licensed for a specific bed count. A property that looks perfect on a walkthrough can fail inspection over something as simple as bedroom window egress size or a missing second exit from a basement level. If you're comparing a standalone assisted living facility building against a converted single-family home for a smaller group home model, run both scenarios past your local zoning office and your state fire marshal's office before you sign a lease or purchase agreement. It's a cheap phone call compared to finding out after closing that the property doesn't qualify.
What should I do next if I want to open a residential care home?
Pick your population and license category first, everything else follows from that decision. A senior assisted living license, an adult foster care license, and an IDD group home license involve different staffing ratios, different inspection checklists, and often different state agencies entirely, so guessing at this stage wastes time later. Next, confirm your state's specific application requirements directly with the licensing agency rather than assuming your neighboring state's rules apply, since fee amounts, required policies, and inspection timelines are genuinely different state by state. If you'd rather not build every policy manual, staffing worksheet, and application checklist from a blank page, that's the exact gap GroupHomePath's $299 State Group Home Licensing Kit is built to close, with state-specific templates you can adapt to your facility. Start at /licensing-kit-builder once you know your state and license category. Whatever path you take, budget real time for the property and staffing pieces alongside the paperwork. Operators who treat licensing as a single form to submit tend to get surprised by the zoning check, the fire inspection, or the staffing ratio requirement much later in the process than they'd like.
Frequently asked questions
What is assisted living?
Assisted living is housing that helps people with daily activities like bathing, dressing, and medication reminders, in a home-like setting rather than a medical one. It's for people who need regular support but not the ongoing medical or nursing care a nursing home provides. Licensing and rules vary by state, and there's no single federal definition [4].
What is a group home?
A group home is a small licensed residential setting, often a house, where a limited number of residents (commonly three to ten, depending on the state) live together and get supervision or care from staff. Group homes serve seniors, adults with developmental disabilities, people in mental health recovery, or people in substance use recovery, and licensing rules differ by population served.
What is an assisted living facility?
An assisted living facility is the licensed building and program providing assisted living services: a private or shared room, meals, personal care help, medication reminders, and supervision, usually set up like an apartment community. States license these under varying names, so confirm the exact license category with your state's licensing agency before comparing facilities.
What is the difference between assisted living and a nursing home?
Assisted living is for people who need help with daily tasks but not medical care; nursing homes provide skilled nursing and medical supervision for people with more complex health needs. Nursing homes are Medicare/Medicaid certified under federal rules; assisted living is licensed only at the state level, with no federal certification standard [3][4].
What does assisted living provide?
Assisted living typically provides a room, meals, help with bathing and dressing, medication reminders, housekeeping, transportation, and social activities. It generally doesn't include skilled nursing, physical therapy, or complex medical treatment. Exact services and pricing structures (all-inclusive vs. tiered add-ons) vary a lot between facilities, so always request a written fee schedule.
How do I start a group home?
Form your business entity, identify which state agency licenses your specific population (senior, IDD, mental health, or recovery), secure a property that meets zoning and fire code, and build your staffing plan and policy manual before applying. Most states require these documents as part of the initial application, so completing them early avoids delays [9].
How do I start a group home if I have no prior experience?
Most states require an administrator or licensee to meet minimum training, education, or experience requirements, which vary widely, so confirm exact qualifications with your state licensing agency first. Many operators bring in a qualified administrator or complete required state training programs before applying if they don't personally meet the experience threshold yet.
Does Medicare cover assisted living facilities?
No. Medicare does not cover the ongoing cost of assisted living, since it classifies that as custodial care. Medicare's own guidance states it "doesn't cover long-term care (also called custodial care) if that's the only care you need" [2]. Medicare may still cover separate medical services a resident receives, like doctor visits or short-term skilled nursing after a hospital stay.
Does Medicaid pay for assisted living or group homes?
Sometimes. Medicaid Home and Community-Based Services (HCBS) waivers can cover personal care and support services in assisted living or group home settings in many states, though not the room and board portion, and availability depends on your state's specific waiver programs and often a waiting list [1].
How do I find residential care homes near me that are actually licensed?
Check your state licensing agency's public facility database first; most states publish one, similar to California's Community Care Licensing lookup [8]. The federal Eldercare Locator, run by the Administration for Community Living, can also point you to local resources if you're unsure which state office to contact [5].
How much does a residential care home cost per month?
National medians from Genworth's 2023 Cost of Care Survey show assisted living at $5,350 a month, nursing home semi-private rooms at $8,669, and private rooms at $9,733 [7]. Costs vary widely by state, region, and level of care needed, so treat national medians as a starting point, not a quote.
Is a group home the same as assisted living?
Not exactly. Both provide supervision and personal care in a residential setting, but group homes are usually smaller (often three to ten residents), serve a wider range of populations beyond seniors (including IDD and mental health), and are frequently licensed under a different state statute than assisted living communities.
What zoning rules apply to opening a group home?
Zoning rules vary by city and county, and some single-family residential zones restrict group home use. The federal Fair Housing Act protects group homes for people with disabilities from certain exclusionary zoning practices [10], but this doesn't replace the need to meet your state's licensing, building, and fire code requirements.
Sources
- Medicaid.gov, Home & Community-Based Services: Medicaid HCBS waivers let beneficiaries receive services in the community rather than institutions, sometimes covering assisted living or group home services
- Medicare.gov, Long-term care coverage: Medicare does not cover long-term custodial care such as ongoing assisted living room and board
- California Department of Social Services, Community Care Licensing Division: Example of a state licensing agency maintaining a public searchable database of licensed residential care facilities
- National Library of Medicine (NCBI Bookshelf): Assisted living facilities provide a level of care between independent living and nursing homes, offering assistance with activities of daily living.
- Medicaid.gov: Nursing facilities differ from assisted living in that they provide a higher level of medical care and are subject to distinct Medicaid coverage and licensing rules.
- U.S. Small Business Administration (SBA): Starting a group home or residential care business requires obtaining specific state and local licenses and permits.