Last updated 2026-07-24
TL;DR
Assisted living is regulated entirely at the state level; there's no federal license or single national rulebook. Each state's health or social services department sets its own staffing ratios, inspection schedule, and application fees. Medicare doesn't pay for room and board in assisted living, though some states use Medicaid HCBS waivers to cover services. Start by confirming your state's specific agency and rule chapter before you write a business plan.
What is assisted living?
Assisted living is a licensed residential option for adults, usually seniors, who need help with daily activities like bathing, dressing, medication reminders, and meals but don't need the round-the-clock skilled nursing care a nursing home provides. Residents typically live in private or semi-private rooms or apartments and get help from staff on a schedule that fits the building's license category. There is no single federal definition. The Centers for Medicare & Medicaid Services (CMS) does not license or directly regulate assisted living; that job belongs to each state's health department, department of social services, or a dedicated licensing division [1]. That's why you'll see wildly different terms for what is functionally the same building: "residential care facility" in California, "assisted living residence" in Florida, "personal care home" in Georgia, "adult foster home" in Oregon and Michigan. Because states write their own rules, the actual experience of living in or operating an assisted living community in Ohio can look quite different from one in Texas, even though both call themselves "assisted living." If you're comparing options for a family member or scouting a market to open a home in, you have to read that specific state's regulations, not a national average. The assisted living hub on this site breaks down individual state rule sets if you want to go state by state.
What is a group home?
A group home is a small residential setting, often a single-family style house, where a handful of unrelated residents live together and receive support from staff who work in shifts. The term gets used across several populations: intellectual and developmental disabilities (IDD), mental health, substance use recovery, and adult foster care for seniors. Group homes usually house fewer residents than a licensed assisted living facility, commonly somewhere between 4 and 10 beds depending on the state and license type, though some states allow larger homes under different licensing tiers. The staffing model, physical plant rules (fire sprinklers, exits, bedroom square footage), and required policies (medication administration, behavior support plans, incident reporting) all come from the specific program's licensing chapter, which again varies by state and sometimes by county zoning overlay. If you're trying to figure out whether you need an assisted living license or a group home license for the population you want to serve, the honest answer is: it depends entirely on your state's regulatory structure and which population you're serving. Confirm with your state licensing agency before you sign a lease or lender agreement, because the license category determines your build-out requirements, staffing ratios, and inspection frequency.
What is an assisted living facility (and how is it different from a group home)?
An assisted living facility is the licensed building itself, the physical structure plus the state license that authorizes it to provide personal care services to residents who live there. It's the legal entity your state inspects, more than a marketing name. The line between "assisted living facility" and "group home" often comes down to size, population served, and which state statute or administrative code chapter applies. A 60-bed assisted living community serving general senior populations under a state's aging-services code is a very different regulatory animal than a 6-bed adult foster care group home serving residents with IDD under a disability-services code, even though a visitor might describe both as "assisted living" in casual conversation. For licensing purposes, what matters is: which agency issues your license, what level of care your license permits (does it allow nursing tasks, memory care, hospice coordination?), and what your maximum capacity is. Pull your state's actual administrative code section for assisted living or residential care before you assume your building type qualifies. Pages like assisted living facility and assisted living facilities on this site walk through how states define capacity tiers and care levels.
What is assisted living vs. nursing home? What's the actual difference?
| Primary regulator | State health/social services dept, varies by state | State health dept, plus federal Medicare/Medicaid Conditions of Participation [2] | |
|---|---|---|---|
| Staffing | Personal care aides, medication aide, on-call nurse (state-dependent) | Licensed nurses on-site 24/7, required minimum staffing hours | |
| Level of care | Help with ADLs (bathing, dressing, meds) | Skilled nursing, wound care, IV therapy, rehab | |
| Medicare coverage | Generally no coverage for room/board or custodial care | Covers up to 100 days per benefit period after a qualifying hospital stay, with conditions [3] | |
| Typical setting | Apartment-style or house-style residential | Hospital-style facility with nursing stations | Nursing homes that participate in Medicare or Medicaid must meet federal Conditions of Participation set by CMS, including specific nurse staffing requirements. CMS published a final rule in the Federal Register on May 10, 2024 requiring long-term care facilities to provide a minimum of 3.48 hours of nursing care per resident per day and to have a registered nurse on-site 24 hours a day, seven days a week, with phased-in compliance dates through 2026 and later for rural facilities [2]. Assisted living has no equivalent federal staffing floor; those numbers, if they exist at all, come from the state. The short version: if someone needs a wheelchair-accessible bathroom and reminders to take their pills, assisted living usually fits. If someone needs a ventilator, IV antibiotics, or has a wound that needs daily skilled dressing changes, that's nursing home territory. |
Assisted living provides help with daily living activities in a residential setting; a nursing home (also called a skilled nursing facility) provides 24-hour licensed nursing care for people with more significant medical needs, often after a hospital stay or for a chronic condition that requires ongoing clinical management. Here's the split most states draw: | Feature | Assisted living | Nursing home (skilled nursing) |
What does assisted living provide?
Assisted living typically provides help with activities of daily living (ADLs) such as bathing, dressing, toileting, mobility, and eating, plus meals, housekeeping, laundry, medication management, and some level of social and recreational programming. Most states also require 24-hour staff availability, even if that means an on-call awake staff member rather than a nurse. What assisted living does NOT typically include, in most states, is ongoing skilled nursing care, ventilator management, or complex wound care; residents who need that level of care usually have to transfer to a nursing home or bring in outside home health services, subject to the state's rules on what can be delivered in an assisted living setting. Medication management is one of the most tightly regulated services and varies enormously by state. Some states let unlicensed staff who complete a medication aide training program administer medications; others require a licensed nurse for any medication that isn't self-administered. Some states cap the acuity level a resident can have before the facility must discharge them to a higher level of care (commonly called "negotiated risk" or "discharge criteria" provisions). Confirm your specific state's medication administration rules and discharge criteria before building your admissions policy, because getting this wrong is one of the most common reasons operators get cited during inspection.
Does Medicare cover assisted living facilities?
No. Medicare does not cover the cost of room and board in assisted living, and it generally does not pay for custodial personal care services delivered there either. CMS states plainly that "Medicare doesn't cover room and board when you get hospice care in your home or another facility where you live (like a nursing home)" and separately does not list assisted living as a covered benefit category [4]. Medicare Part A and Part B are built around medical care: hospital stays, doctor visits, skilled nursing care after a qualifying hospital stay (up to 100 days per benefit period, with a copay after day 20), home health, and hospice. None of those categories map onto the custodial, non-medical support that's the core of assisted living [3]. What Medicare will pay for, even for someone living in assisted living, is medically necessary services delivered there: doctor visits, physical therapy, durable medical equipment, or hospice care if the resident qualifies. It just won't pay the facility's monthly rate for room, board, and personal care assistance. Medicaid is a different story, though still not simple. Many states use a Medicaid Home and Community-Based Services (HCBS) waiver, authorized under section 1915(c) of the Social Security Act, to help pay for the personal care services (not room and board) delivered in some assisted living settings [5]. Coverage, eligibility, and which facilities participate vary enormously by state; some states have no such waiver for assisted living at all. Check the funding-and-medicaid resources on this site and your state Medicaid agency's waiver page directly before assuming coverage exists in your state.
How to start a group home: what's the actual process?
Starting a group home means working through licensing, zoning, staffing, and inspection requirements set by your specific state, and the order of operations matters more than people expect. Here's the general sequence, though the exact steps and agency names differ by state. 1. Identify your population and license category. IDD group homes, mental health residential programs, adult foster care, and senior assisted living/residential care each fall under different statutes and different licensing agencies, sometimes within the same state. Confirm which category fits before you do anything else. 2. Contact the state licensing agency directly. Every state has a specific division that issues the license you need (search "[your state] assisted living licensing" or "[your state] residential care license application" on the state's official .gov site). Ask for the current application packet, fee schedule, and administrative code citation. Fees, minimum square footage per resident, staff-to-resident ratios, and background check requirements all vary by state; don't rely on another state's numbers. 3. Check zoning before signing a lease. Group homes are frequently subject to local zoning ordinances, and some states have specific statutes protecting group homes from discriminatory zoning under the federal Fair Housing Act, but the local process for permits, occupancy classification, and fire marshal sign-off still runs through your city or county. Confirm with your local planning department in addition to the state licensing agency. 4. Build your policy and procedure manual. States typically require written policies covering medication administration, emergency preparedness, resident rights, grievance procedures, staff training, and incident reporting before they'll issue a license. This is usually the single most time-consuming piece of the application for first-time operators. 5. Hire and train staff to the state's required ratios and credentials. Many states require a minimum number of direct care hours per resident per day, specific administrator certification (sometimes a state exam), and CPR/first aid for all direct care staff. 6. Pass the pre-licensing inspection. A state surveyor or fire marshal (sometimes both) will walk the physical building before you can open, checking exits, smoke detectors, sprinklers if required, resident room sizes, and bathroom accessibility. 7. Submit your application with all required attachments and pay the fee. Processing times vary widely by state, from a few weeks to several months, and incomplete applications are the most common reason for delay. Building this packet from scratch, state by state, is genuinely a lot of paperwork, which is why some operators use a starting template like our $299 one-time State Group Home Licensing Kit to get a policy manual and application checklist scaffolded for their state, then customize it with their specific state agency's current forms and fee amounts rather than starting with a blank page.
How do I start a group home if I've never done licensing paperwork before?
If this is your first time through a state licensing process, start smaller than you think you need to. Call your state licensing agency's group home or residential care division before you write a business plan, and ask three questions directly: which license category fits your intended population, what the current application fee is, and whether they have a published administrative rule (regulation) number you can read in full. Most state agencies publish their residential care or group home regulations as a specific chapter of administrative code, and reading that chapter start to finish, even the boring parts about fire drills and food storage temperatures, will save you from expensive surprises during inspection. Don't rely on a general contractor's assumption about occupancy classification; confirm it with the state fire marshal or the licensing agency's building reviewer directly, because a house that looks fine to you may need a different occupancy classification (like "I-1" under many state fire codes) once it holds paying residents. Budget real time for this. Between finding a compliant property, passing zoning, writing policies, hiring qualified staff, and getting through the pre-licensing inspection, a realistic timeline for a first group home is commonly several months to over a year, and that range comes from the sheer number of sequential approvals (zoning, then building, then fire, then licensing) rather than any single slow step. Nobody can promise you a faster timeline, and be skeptical of anyone who does.
What are the biggest state-to-state differences operators run into?
The differences that trip up new operators most are staffing ratios, resident capacity limits, medication administration rules, and physical plant requirements, and all four vary by state with no federal floor to fall back on for assisted living specifically (unlike nursing homes, which do have the federal minimum described above [2]). Capacity limits matter because they determine your whole business model. Some states cap "group home" style licenses at a small number of residents (commonly in the single digits) while treating anything larger as a different license category ("assisted living facility" or "residential care facility") with different rules entirely. Building for the wrong capacity tier can mean redoing your application from scratch. Staffing ratios are almost never expressed the same way twice. Some states specify a minimum number of direct care staff hours per resident per day; others specify a staff-to-resident ratio that changes by shift (day vs. night) or by resident acuity level. A few states leave staffing largely to the facility's own staffing plan, reviewed and approved during licensing, rather than fixing a number in regulation at all. Inspection frequency also differs. Many states inspect newly licensed homes within the first year and then on an annual or biennial cycle after that, sometimes more often if there have been substantiated complaints. Ask your state licensing agency directly what their published inspection cycle is and whether complaint-driven inspections are unannounced (in most states, they are).
What should be in an assisted living or group home policy manual?
A state-compliant policy manual needs to cover, at minimum, admissions and discharge criteria, medication administration procedures, emergency and disaster preparedness, resident rights and grievance procedures, staff training and background check documentation, infection control, and incident/accident reporting, though the exact required sections come from your state's specific licensing chapter. Most surveyors will ask to see these policies in writing during your pre-licensing inspection, more than hear you describe them verbally. A common mistake is writing a generic policy manual pulled from another state's template without updating the specific citations, reporting timelines, or agency contact information; a surveyor who catches an outdated cross-reference to the wrong state code will flag the whole document. Our policies-and-procedures hub walks through section-by-section guidance for building this manual, and if you'd rather not build the whole packet from a blank document, the $299 one-time State Group Home Licensing Kit is built around this exact structure so you can adapt it to your state's citations rather than writing every policy from scratch.
How does zoning affect where you can open a group home or assisted living facility?
Zoning determines whether your chosen property is even legally allowed to operate as a residential care facility, and it's handled entirely at the local (city or county) level, separately from your state license. A property can meet every state licensing standard and still be denied if it sits in the wrong zoning district or lacks the required permits. Many states have statutes that limit how restrictively a city or county can zone small group homes for people with disabilities, generally requiring them to be treated similarly to any other single-family residential use up to a certain number of residents, partly in response to protections under the federal Fair Housing Act. The Fair Housing Act, codified at 42 U.S.C. 3604, makes it unlawful to discriminate in housing based on disability, and HUD's Office of Fair Housing and Equal Opportunity enforces those protections against zoning ordinances that single out group homes for people with disabilities [6]. Larger assisted living facilities, by contrast, are more commonly zoned as a distinct commercial or institutional use subject to conditional use permits, parking requirements, and sometimes public hearings. Before signing any lease or purchase agreement, confirm with your local planning or zoning department, in writing if possible, that your specific intended use and resident capacity is allowed at that address. See the zoning-and-property hub for more detail on how this process typically runs.
Frequently asked questions
What is assisted living?
Assisted living is a licensed residential setting for adults, usually seniors, who need help with daily activities like bathing, dressing, and medication reminders but don't need 24-hour skilled nursing care. Rules are set entirely by each state, not the federal government, so services, staffing, and terminology vary widely from one state to the next.
What is a group home?
A group home is a small residential setting, often a house, where a handful of unrelated residents live together and get support from shift-based staff. The term covers homes for IDD, mental health, recovery, and adult foster care populations, and licensing requirements come from the specific state agency overseeing that population.
What is an assisted living facility?
An assisted living facility is the licensed building and organization authorized by a state to provide personal care services (help with bathing, dressing, medications, meals) to residents living there. The specific license category, capacity limits, and allowed care level come from that state's administrative code, not a national standard.
What is the difference between assisted living and a nursing home?
Assisted living helps with daily living activities in a residential setting; a nursing home provides 24-hour skilled nursing care for people with significant medical needs. Nursing homes must meet federal Medicare/Medicaid staffing rules, including a 2024 CMS requirement of 3.48 hours of nursing care per resident per day; assisted living has no federal staffing floor.
Does Medicare cover assisted living facilities?
No. Medicare does not cover room and board or custodial personal care in assisted living. It will pay for medically necessary services delivered there, like doctor visits or physical therapy, and it covers skilled nursing facility stays up to 100 days per benefit period under specific conditions, but not ongoing assisted living residency costs.
Does Medicaid pay for assisted living?
Sometimes, through state-specific Medicaid Home and Community-Based Services (HCBS) waivers authorized under section 1915(c) of the Social Security Act, which can cover personal care services (not room and board) in some assisted living settings. Coverage and participating facilities vary by state; some states have no such waiver for assisted living at all.
How do I start a group home?
Identify your population and license category, contact your state's specific licensing agency for the current application and fee schedule, confirm zoning with your local planning department, write required policies, hire staff to the state's ratios, pass the pre-licensing inspection, then submit your application. Order and requirements vary by state, so confirm each step directly with your state agency.
How much does it cost to start a group home?
Costs vary enormously by state, population served, and whether you lease or buy property, covering licensing fees, background checks, staff training, insurance, and build-out to meet fire and accessibility codes. There's no single reliable national figure; get your state's actual fee schedule from the licensing agency and build a property-specific budget before committing to a lease.
How long does it take to get an assisted living or group home license?
Timelines vary by state and by how quickly your property clears zoning and fire inspection, but a realistic range for a first-time operator is commonly several months to over a year once you count zoning approval, building modifications, staffing, and the licensing application itself. No agency can guarantee a faster timeline.
What's the difference between assisted living and independent living?
Independent living is housing for seniors who don't need regular help with daily activities; it typically isn't licensed as a care facility at all. Assisted living is licensed by the state specifically because staff provide hands-on help with activities like bathing, dressing, and medication management.
Can a group home operate without a state license?
In nearly every state, providing personal care services to unrelated residents in a residential setting requires a license, and operating without one can result in fines, forced closure, or criminal penalties depending on the state. Confirm your state's specific licensure threshold (some exempt very small private-pay arrangements) with the licensing agency directly.
What staffing ratios do assisted living facilities need to follow?
There's no federal staffing ratio for assisted living. States set their own minimums, sometimes expressed as direct care hours per resident per day and sometimes as a staff-to-resident ratio that changes by shift or resident acuity. Confirm the current numeric requirement with your specific state's licensing agency before building a staffing plan.
Do assisted living facilities get inspected, and how often?
Yes. States typically inspect assisted living and group home facilities before initial licensing and then on an ongoing cycle, often annually or every two years, plus unannounced complaint-driven inspections when a concern is reported. The exact cycle and whether inspections are announced varies by state; confirm with your licensing agency.
Sources
- Medicaid.gov, Home & Community Based Services: States, not the federal government, administer and define home and community-based services programs including those covering assisted living settings
- Federal Register, Medicare and Medicaid Programs; Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting (89 FR 40876): CMS finalized a rule requiring 3.48 hours of nursing care per resident per day and 24/7 RN presence in long-term care facilities
- Medicare.gov, Skilled Nursing Facility Care: Medicare covers skilled nursing facility care up to 100 days per benefit period after a qualifying hospital stay, with a copay after day 20
- Medicare.gov, Hospice Care Coverage: Medicare does not cover room and board in a facility where a person lives, including assisted living, even alongside hospice care
- Social Security Administration, Section 1915(c) of the Social Security Act: Section 1915(c) authorizes Medicaid Home and Community-Based Services waivers that some states use to cover personal care services in assisted living
- U.S. Department of Justice, Fair Housing Act, 42 U.S.C. 3604: The Fair Housing Act prohibits housing discrimination based on disability, which limits how restrictively cities can zone group homes for people with disabilities