Last updated 2026-07-23
TL;DR
A group home is a state-licensed residential property where a small group of people, often adults with disabilities, mental illness, or seniors, live together with paid staff support for daily living, supervision, or care. It's smaller and less medical than a nursing home. States license it, not the federal government, and rules on size, staffing, and services vary widely by state and population served.
What is a group home?
A group home is a licensed residential property where a small number of people, usually somewhere between three and sixteen residents depending on the state and the population served, live together and get paid staff support for daily living, supervision, or care. It's a licensed business, more than a rental house with roommates splitting rent. The operator holds a license from a state agency, sometimes called a department of health, department of social services, or department of human services (the exact name varies by state, so confirm with your state licensing agency before you assume anything). That license spells out who can live there, how many staff must be present at any given time, what training staff need, and what services the home is allowed to provide. The term covers a lot of ground. A group home for adults with intellectual or developmental disabilities looks different from a group home for teens in the child welfare system, which looks different again from a small assisted living home for seniors or a recovery residence for people leaving substance use treatment. What ties all of these together is the licensing model itself: a home-like setting, a capped occupancy, and a state regulator who inspects the place on a schedule, and sometimes without warning. Group homes exist largely because of a deliberate policy shift away from large institutions. In Olmstead v. L.C. (1999), the Supreme Court held that unnecessary institutionalization of people with disabilities is a form of discrimination under the Americans with Disabilities Act, finding that "unjustified isolation" of people with disabilities "is properly regarded as discrimination based on disability" [1]. Group homes and small residential settings are the direct, practical result of that ruling and the community-based care push that followed it.
What is assisted living, and what is an assisted living facility?
Assisted living is a level of care, not a building. It describes support for people, most often seniors, who need help with daily activities like bathing, dressing, or medication reminders but don't need the round-the-clock skilled nursing that a nursing home provides. The National Institute on Aging describes it as housing for people who need help with daily care but not the intensive medical support that a nursing home delivers [2]. An assisted living facility (ALF) is the licensed physical property where that care happens. States use different names for the same basic concept: California calls its version a Residential Care Facility for the Elderly (RCFE) and licenses it through the Department of Social Services' Community Care Licensing Division [3]. Other states use "assisted living residence," "personal care home," or "residential care home." The label changes, the underlying model doesn't move much: private or semi-private rooms, shared common areas, staff on site, and a state license capping occupancy and dictating services. Scale varies enormously. A small assisted living home might have six beds in a converted residential property. A large one might have 150 units and look more like a hotel. According to CDC's National Study of Long-Term Care Providers, there were roughly 28,900 residential care communities nationwide with just under a million licensed beds in the most recent full count [4]. That's the scale of the industry group homes and assisted living operators are competing and licensing within. If you're researching a specific state's rules, start with our guides on assisted living and assisted living facilities, since the licensing category name and the paperwork behind it differ state to state.
What does assisted living provide?
Assisted living typically provides a bundle of non-medical support services plus a place to live. That usually includes three meals a day, housekeeping and laundry, help with bathing and dressing, medication reminders (and, in many states, medication administration by trained staff), transportation to appointments, social and recreational activities, and staff available on site 24 hours a day, even if they're not awake all night in every state. What it generally does not provide is skilled nursing care. Assisted living residents are not supposed to need daily wound care, IV therapy, ventilator support, or the kind of clinical monitoring a hospital or nursing home delivers. If a resident's medical needs escalate past what the assisted living license allows, most states require a move to a higher level of care, or bringing in outside home health or hospice services under a separate arrangement. Cost runs high and varies a lot by state and market. Genworth's Cost of Care Survey put the national median monthly cost for a private, one-bedroom assisted living unit at around $5,350 in its 2023 data [5]. Rural markets tend to run lower, coastal and urban markets often run well above that median. Families and operators researching a specific market should treat any national average as a rough starting point, not a quote. For operators building a service list for a policy manual, our guide on assisted living at home walks through how smaller, home-based settings scope their services differently than larger facilities.
What is the difference between assisted living and a nursing home?
| Regulated by | State licensing agency only | State survey agency plus federal CMS certification | |
|---|---|---|---|
| Staffing | Aides, med techs, some states require an RN consultant | Licensed nurses required, RN on site per federal rule | |
| Level of care | Help with daily activities, supervision | Skilled nursing, rehab, complex medical needs | |
| Typical setting | Home-like, smaller resident counts | Larger, more clinical, hospital-adjacent feel | |
| Paid mostly by | Private pay, SSI, some Medicaid HCBS waivers | Medicare (short-term), Medicaid (long-term) | The practical difference for a family choosing between the two usually comes down to medical need. If someone just needs help remembering pills and getting dressed, assisted living or a group home fits. If someone needs a ventilator, wound care, or post-surgical rehab, that's a nursing home. |
The short answer: assisted living is non-medical support in a home-like setting, and a nursing home (also called a skilled nursing facility) is medical care delivered under federal certification standards, with a registered nurse required on site and regulatory oversight tied to Medicare and Medicaid participation. Nursing homes that accept Medicare or Medicaid must follow federal requirements under 42 CFR Part 483, which state that a facility "must provide services and activities to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident" [6]. That's a federal floor, enforced through state survey agencies and tracked publicly on Medicare's Care Compare tool [7]. Assisted living has no equivalent federal certification. It's licensed entirely at the state level, and the specific rules (staffing ratios, nurse involvement, medication administration limits) differ from state to state. | | Assisted living / group home | Nursing home |
Does Medicare cover assisted living facilities?
No. Medicare does not cover the room and board cost of assisted living or a group home. Medicare's own guidance states plainly that "Medicare doesn't cover long-term care (also called custodial care) if that's the only care you need" [8]. Custodial care is the technical term for help with daily activities like bathing, dressing, and eating, which is exactly what assisted living and most group homes provide. Medicare will pay for specific medical services a resident receives, like doctor visits, physical therapy, or a short skilled nursing facility stay after a qualifying hospital stay (up to 100 days under specific conditions). It just won't pay the monthly rent-and-care bill at an assisted living facility or group home. Medicaid is a different story, and a common source of confusion. Medicaid can pay for many of the actual care services delivered in a residential setting through Home and Community-Based Services (HCBS) programs, often run under a 1915(c) waiver. Medicaid's own description of the program: HCBS lets states offer services to people "in home and community-based settings, rather than institutional settings" [9]. But even under an HCBS waiver, Medicaid generally still will not pay for room and board in a group home or assisted living facility; that part usually falls to the resident's own income (often Social Security or SSI) or a state supplemental payment program, where one exists. Confirm the specifics with your state Medicaid agency and your state licensing agency, since waiver names and covered services vary by state.
What are the different types of group homes?
Group home is an umbrella term. The population served determines the license category, the staffing rules, and often which state agency you'll deal with. Common categories include: group homes for adults with intellectual or developmental disabilities (IDD), often licensed through a state's disability services or developmental disabilities agency; mental health residential group homes, licensed through behavioral health or mental health authorities; recovery residences for people in substance use recovery, which SAMHSA describes broadly as "safe, healthy, family-like living environments" that support recovery ; adult foster care homes, a specific licensing category in states like Michigan and Oregon that places a small number of adults in a family-style home with a live-in or on-site caregiver; and senior residential assisted living (RAL), the smaller, home-based version of assisted living for older adults. Each category has its own capacity limits, its own staffing training requirements, and often its own inspection agency. A single state can have four or five different licensing divisions handling these categories separately, which is why so many first-time operators get confused about which agency actually issues their license. The population you intend to serve should be the very first decision you make, before you look at property, before you write a single policy page, because it determines almost every other requirement downstream.
How do I start a group home?
Starting a group home is a licensing process first and a real estate or business decision second. The order matters, because the license category determines your staffing ratios, your building code requirements, and your zoning classification. A reasonable sequence: (1) pick the population you want to serve, since this determines your licensing agency and category; (2) read the actual statute and regulations for that license category in your state, not a summary of them; (3) write your policies and procedures manual, covering admissions, medication management, emergency procedures, resident rights, and staffing plans; (4) find and secure a property that meets your state's occupancy, fire, and accessibility rules, and confirm zoning treats it as an allowed residential use; (5) build a staffing plan with job descriptions, training hours, and background check procedures that match your state's minimum requirements; (6) submit your license application with the required fees (fees vary widely by state and by license type, so confirm the current fee with your state licensing agency rather than relying on a figure from another state); (7) pass your pre-licensing inspection; and (8) if you plan to serve Medicaid recipients, enroll as a Medicaid provider and, if applicable, get approved under the relevant HCBS waiver. Most of the actual delay in this process comes from paperwork gaps, not property problems: an incomplete policy manual, a staffing plan that doesn't match the state's minimum ratios, or missing background check documentation. That's the specific gap the $299 State Group Home Licensing Kit is built to close: state-specific application checklists and policy manual templates so you're not starting from a blank page. It doesn't get you approved faster and it doesn't replace reading your state's actual regulations, but it does save you from re-drafting the same manual three times because you missed a required section the first time.
What licensing and staffing requirements should I expect?
Every state sets its own staffing ratios, training hours, and background check rules, and they differ enough by license category that a generic number would mislead you more than help you. That said, most states share a common structure. Expect a minimum staff-to-resident ratio that changes based on time of day (higher during waking hours, lower or awake-overnight-only at night), required first aid and CPR certification for direct care staff, state and often FBI-level fingerprint background checks for anyone with resident contact, and specific training hours before a new hire can work unsupervised. Many states also require medication administration training for any staff member who will handle resident medications, separate from general caregiver training. Inspections typically happen at least annually, plus whenever there's a complaint, and many state agencies reserve the right to show up unannounced. California's Community Care Licensing Division, for example, is the agency responsible for licensing and inspecting RCFEs and similar facilities in that state [3]; most states run a comparable division under a different name. Because these numbers (staff ratios, training hour minimums, fingerprint requirements) change by state and sometimes by county, treat any specific figure you read online as a starting point and verify it against your state licensing agency's current regulations before you build a staffing budget around it.
What zoning and property rules apply to group homes?
Group homes serving people with disabilities get specific legal protection under the federal Fair Housing Act, which generally requires cities to treat them like any other single-family residential use rather than a special or restricted use. HUD's own guidance describes the reasonable accommodation obligation local governments have toward housing for people with disabilities under the Act . That federal protection doesn't mean zoning fights don't happen. Plenty of cities still try to impose spacing requirements between group homes, special permits, or occupancy caps below what state licensing allows, and some of those rules have been challenged and struck down under the Fair Housing Act over the years. The Olmstead decision's push toward community-based settings adds legal weight on the side of group homes locating in ordinary residential neighborhoods rather than being pushed into commercial or institutional zones [1]. Before you sign a lease or a purchase agreement, get written zoning confirmation from the local planning department that your intended use is allowed as-of-right, or find out exactly what conditional use process you'll need to go through. This step trips up more first-time operators than the state license application does, mostly because people assume any residential property will work and then discover a local ordinance treating a licensed group home differently than a regular rental house.
How are group homes and assisted living paid for?
Payment comes from a mix of sources, and almost nobody pays for it out of one pocket. Private pay (family savings or income) covers a large share of assisted living costs nationally. Long-term care insurance covers some, though a shrinking share of new policies are sold each year. Supplemental Security Income (SSI) is the federal income floor many group home residents rely on for personal spending money and sometimes toward room and board; the SSI federal benefit rate for an individual was $967 a month as of 2025, per the Social Security Administration's published COLA rates , though several states add a state supplement on top of that federal amount. Medicaid's Home and Community-Based Services waivers can pay for the actual care and supervision services delivered in a group home setting, personal care, habilitation, behavioral support, for people who qualify financially and medically, without paying for the underlying rent [9]. This is a common point of confusion: Medicaid paying for services doesn't mean Medicaid is paying the resident's whole bill. Operators building a budget need to map out, line by line, which parts of their monthly rate are covered by which funding source, because mixing private pay residents and Medicaid waiver residents under one rate structure gets complicated fast, and getting it wrong is a common reason operators fail their first Medicaid billing audit.
Where do I find my state's exact group home requirements?
Start with your state's licensing agency directly. Search for your state name plus "group home license" or "residential care license" and look for a .gov domain; most states publish their regulations, application forms, and fee schedules online, though the level of detail and how current the page is varies a lot state to state. If you can't find the exact division, call your state's department of health or department of human services main line and ask them to route you; group home licensing sits in different departments in different states and there's no shortcut around confirming this directly. What you're looking for specifically: the statute or administrative code section governing your license category, the current application form and fee schedule, the staffing and training requirements, and the inspection checklist your facility will be measured against. Reading the actual regulation text, not a secondhand summary, is the only way to avoid building a policy manual around the wrong assumptions. If you'd rather not start from a blank document, GroupHomePath's State Group Home Licensing Kit is a $299 one-time reference built to organize state-specific application checklists, policy manual templates, and staffing plan starting points in one place. It's a paperwork tool, not a guarantee of approval, and it won't replace a direct call to your state licensing agency for anything that's changed recently or that varies by county.
Frequently asked questions
What is a group home?
A group home is a licensed residential property where a small number of people, usually somewhere between three and sixteen depending on the state, live together and receive paid staff support for daily living, supervision, or care. It's licensed by a state agency, not the federal government, and the specific rules depend heavily on the population served, such as seniors, people with disabilities, or people in mental health or substance use recovery.
What is assisted living?
Assisted living is a level of care for people, most often seniors, who need help with daily activities like bathing, dressing, and medication reminders but don't need the round-the-clock skilled nursing a nursing home provides. The National Institute on Aging describes it as housing paired with personal care support that falls short of full medical nursing care.
What is an assisted living facility?
An assisted living facility (ALF) is the licensed physical building or property where assisted living care happens. States use different official names for the same basic license, such as Residential Care Facility for the Elderly in California, but the concept is consistent: a state-licensed, home-like setting with staff, capped occupancy, and defined services.
What is the difference between assisted living and a nursing home?
Assisted living provides non-medical help with daily activities in a home-like setting licensed only at the state level. A nursing home provides skilled medical care, requires a registered nurse on site, and follows federal certification rules under 42 CFR Part 483 if it accepts Medicare or Medicaid. Nursing homes generally serve people with heavier medical needs than assisted living residents.
What does assisted living provide?
Assisted living typically provides meals, housekeeping, help with bathing and dressing, medication reminders or administration, transportation, social activities, and staff on site around the clock. It does not typically provide skilled nursing care like IV therapy, ventilator support, or daily wound care; residents needing that level of care usually move to a nursing home.
How do I start a group home?
Pick the population you want to serve first, since that determines your license category and agency. Then read your state's actual regulations, write a policies and procedures manual, secure a zoning-cleared property, build a staffing plan with background checks, submit your license application and fees, and pass your pre-licensing inspection. If you'll take Medicaid residents, enroll separately as a Medicaid provider.
Does Medicare cover assisted living facilities?
No. Medicare does not pay for the room, board, or custodial care costs at an assisted living facility or group home. Medicare states directly that it doesn't cover long-term custodial care if that's the only care a person needs. Medicare will pay for specific covered medical services a resident receives, like doctor visits or short-term skilled nursing after a qualifying hospital stay.
Can Medicaid pay for a group home?
Medicaid can pay for many of the care services delivered inside a group home through Home and Community-Based Services (HCBS) waivers, such as personal care or habilitation support, for people who qualify financially and medically. Medicaid generally does not cover room and board itself; that portion is usually paid through the resident's own income, SSI, or a state supplemental payment, depending on the state.
How many residents can live in a group home?
It depends entirely on the state and the license category. Some states cap small residential care homes at six residents, others allow up to sixteen or more under a different license tier with heavier staffing requirements. There's no single national number; confirm the capacity limit tied to your specific license category with your state licensing agency.
What is adult foster care?
Adult foster care is a specific state licensing category, used in states like Michigan and Oregon, that places a small number of adults, often seniors or people with disabilities, in a family-style home with a resident or on-site caregiver. It functions similarly to a small group home or assisted living setting but falls under its own distinct state statute and licensing division.
Do I need a nursing background to open a group home?
Most states do not require the operator or administrator to be a nurse for a basic assisted living or group home license, though some require a designated administrator to complete a state-approved training or certification course. Requirements differ by license category and by state, so confirm the administrator qualification rules directly with your state licensing agency before assuming you qualify.
How much does it cost to start a group home?
Start-up costs vary enormously based on whether you're buying or leasing property, what renovations the fire and building code require, and your state's licensing and background check fees. There's no reliable national figure, and any single number you see quoted online is likely for one state's fee schedule only; get a current fee list from your state licensing agency before budgeting.
Is a group home the same as an assisted living facility?
They overlap but aren't identical terms. Assisted living facility usually refers to licensed care specifically for seniors needing help with daily activities. Group home is a broader umbrella term that also covers homes for people with intellectual or developmental disabilities, mental health conditions, or substance use recovery, each licensed under different state rules.
Sources
- National Institute on Aging (NIH), Residential Facilities, Assisted Living, and Nursing Homes: Definition of assisted living as help with daily activities short of nursing home level care
- CDC, National Study of Long-Term Care Providers: Roughly 28,900 residential care communities nationwide with just under a million licensed beds
- California Department of Social Services, Community Care Licensing Division: California licenses Residential Care Facilities for the Elderly through its Community Care Licensing Division
- Genworth, Cost of Care Survey: National median monthly cost for a private one-bedroom assisted living unit was around $5,350 (2023 data)
- eCFR, Title 42 Part 483 (Requirements for States and Long Term Care Facilities): Federal nursing home rule requiring facilities to maintain each resident's highest practicable well-being
- Medicare.gov, Long-term care coverage: Medicare does not cover long-term custodial care if that is the only care a person needs
- Medicaid.gov, Home & Community-Based Services: HCBS programs let states deliver Medicaid services in home and community settings rather than institutions
- SAMHSA, Recovery and Recovery Support: Recovery residences are described as safe, family-like living environments supporting substance use recovery
- Social Security Administration, SSI Federal Payment Amounts: SSI federal benefit rate for an individual was $967 per month as of 2025