Last updated 2026-07-25
TL;DR
Look for a current state license posted on-site, a written staffing plan matched to resident needs, individualized care plans, clean and unlocked emergency exits, recent inspection reports with no unresolved violations, and staff who can describe a resident's daily routine without checking notes. Ask to see the last state survey before you sign anything.
what is a group home?
A group home is a licensed residence, usually a house or small facility, where a small number of people (often 4 to 16, depending on the state) live together and receive supervision, support, or care from paid staff. Group homes serve different populations: people with intellectual or developmental disabilities (IDD), people in mental health recovery, people recovering from substance use, and in many states, seniors who need help with daily activities but not full nursing care. The legal definition varies by state and by the population served. Some states license these homes under "adult foster care," others under "community residential facility," "personal care home," or "residential care facility for the elderly." The rules that govern staffing, physical plant, and resident rights all live in state administrative code, not federal law, which is why the same word ("group home") can mean very different things depending on where you're standing. [1] What stays constant is the basic promise: a smaller, more home-like setting than an institution, with staff present to help with things like medication reminders, meals, hygiene, transportation, and behavioral support. If you're touring homes for a family member, that promise is the first thing to test against reality, not the brochure.
what is assisted living?
Assisted living is a licensed residential care model for people, usually older adults, who need help with daily activities like bathing, dressing, medication management, or meals, but who don't need the 24-hour skilled nursing care a nursing home provides. It sits in the middle of the care spectrum: more support than independent living, less medical intensity than a nursing facility. There is no single federal assisted living law. Each state licenses and regulates assisted living under its own statute and its own name; some call it "residential care facility," others "personal care home" or "adult care home." The Centers for Medicare & Medicaid Services (CMS) itself notes that assisted living facilities "are licensed and regulated by the state," not by CMS. [2] Because of that state-by-state variation, two facilities both calling themselves "assisted living" can have very different staffing ratios, medication policies, and admission criteria. That's exactly why touring in person, and reading the actual state inspection reports, matters more than the marketing language on a website. See our related guide on assisted living licensing basics for a state-by-state starting point.
what is an assisted living facility (and how is it different from a group home)?
An assisted living facility is the physical, licensed building or campus where assisted living services are delivered. It can range from a converted single-family home with 6 beds to a purpose-built community with 100+ units, apartment-style rooms, a dining hall, and multiple staff shifts. The term "group home" is often used more broadly and can include smaller assisted living-style residences, but it's also used for IDD group homes, mental health group homes, and recovery residences, populations that assisted living licensure usually doesn't cover. In practice, a small assisted living facility with 6 to 10 residents often looks and feels a lot like a group home from the outside; the difference is the license type, the specific regulations that apply, and who the state expects to be served there. If you're comparing options for a specific family member, the honest first question is: which population does this state license category actually serve, and does my relative's diagnosis and care level fit it? Ask the facility directly which license they hold and ask to see it. It should be posted, framed and visible, near the entrance in most states because that's a common licensing requirement. For more on how these categories differ, see assisted living facility and assisted living facilities.
what does assisted living provide, day to day?
Assisted living typically provides: help with activities of daily living (bathing, dressing, toileting, mobility), medication management or reminders, three meals a day plus snacks, housekeeping and laundry, 24-hour staff availability (not necessarily 24-hour nursing), social and recreational activities, and transportation to medical appointments in many cases. What it does not typically provide is ongoing skilled nursing care, ventilator management, wound care beyond basic first aid, or the intensive rehabilitation therapy you'd get after a hospital stay. Some states allow assisted living facilities to obtain a higher-level license (sometimes called "limited nursing" or "enhanced" license) that permits more medical services on-site, but that's an add-on, not the base model. When you tour, ask for the written service plan template the facility uses, more than a verbal description. A real individualized service plan should list specific tasks ("assist with shower 3x/week," "remind to take 8am medications"), who's responsible, and how often it's reviewed. If staff can't produce this document, or it's generic and unchanged for every resident, that's a real warning sign, not a paperwork technicality.
what is the difference between assisted living and nursing home?
| Regulator | State only | State plus federal (CMS) certification | |
|---|---|---|---|
| Staffing | Aides, some states require an RN/LPN on-call or part-time | 24-hour licensed nursing staff required | |
| Medicare coverage | Not covered for room and board [3] | Covered for short-term skilled care after a qualifying hospital stay [3] | |
| Typical resident | Needs help with ADLs, largely independent otherwise | Needs daily skilled nursing or rehab care | |
| Setting | Home-like, apartment or private room | More clinical, hospital-adjacent feel | One more distinction worth knowing: nursing homes that accept Medicare or Medicaid must meet federal requirements set out in 42 CFR Part 483, including specific staffing and resident rights provisions. [4] Assisted living facilities have no equivalent federal rulebook; everything comes from the state. |
The core difference is the level of medical care and the staffing that goes with it. Nursing homes (also called skilled nursing facilities) provide 24-hour licensed nursing care, are regulated more heavily by both federal and state authorities under Medicare/Medicaid conditions of participation, and serve people with more complex medical needs, including those recovering from surgery, managing chronic illness, or requiring rehabilitation. Assisted living is state-licensed only (no federal certification requirement) and serves people who need help with daily living but not ongoing skilled nursing care. [2] | Feature | Assisted Living | Nursing Home (Skilled Nursing Facility) |
does medicare cover assisted living facilities?
No. Medicare does not cover the cost of room and board at an assisted living facility. Medicare.gov states plainly that Medicare "doesn't cover Room and board when the main purpose is custodial care" and that assisted living "isn't covered." [3] Medicare Part A may cover a short-term stay in a skilled nursing facility after a qualifying 3-day inpatient hospital stay, but that's a nursing home benefit, not an assisted living one, and it's capped (100 days per benefit period, with a copay kicking in after day 20). [3] Medicaid is a different story, but it's still not simple. Medicaid does not pay for room and board in assisted living in most states either, but many states use Medicaid Home and Community-Based Services (HCBS) waivers, authorized under Section 1915(c) of the Social Security Act, to pay for the care services (not the rent) delivered inside a licensed assisted living or group home setting. [5] Coverage, waiver availability, and waitlists vary enormously by state, so the honest answer to "will Medicaid pay for this" is: confirm with your state Medicaid agency and your state licensing agency, because the waiver rules and provider enrollment requirements differ state to state.
what to look for in a group home: the walk-through checklist
Bring this list with you. Don't rely on memory during a tour; you'll forget half of it once you're being shown the nice common room. Licensing and paperwork: Is the current license posted and not expired? Ask to see the most recent state inspection or survey report; most states require these to be available on request, and many post them online through the licensing agency's website. A facility that hesitates to show you this report is telling you something. Staffing: What's the staff-to-resident ratio on the day shift, evening shift, and overnight shift? Ratios required by state regulation are usually a floor, not a target; ask what the home actually runs, more than what's legally required. Ask how long the current staff have worked there; high turnover is one of the most reliable predictors of poor care quality, even though it rarely shows up on an inspection report. Physical safety: Are exits unlocked and unobstructed? Are smoke detectors and sprinklers visibly maintained? Is there a working fire evacuation plan posted, and can staff describe it without reading it off the wall? Check bathrooms for grab bars, non-slip flooring, and call buttons that actually work (push one and see what happens). Care planning: Ask to see a sample (redacted) individualized service or care plan. It should be specific, dated, and reviewed on a real schedule, not boilerplate. Ask how medication administration is documented and who is authorized to administer medications under your state's rules. Culture and daily life: Watch a meal if you can. Notice whether staff talk to residents like adults. Ask what a typical Tuesday looks like for a resident with needs similar to your family member's. Vague answers are a signal. Odor and cleanliness: A slight institutional smell is normal in any building with incontinence care; overwhelming odor, especially masked heavily with air freshener, usually means understaffing, more than an off day.
how to start a group home
Starting a group home is a licensing project before it's a business project. The general sequence, regardless of state or population served, looks like this: 1. Pick your population and license category. IDD, mental health, adult foster care, and senior residential care are usually licensed under separate statutes and separate state agencies. You cannot serve populations outside your license's scope, even if you have the best of intentions. 2. Confirm zoning and property requirements with your state licensing agency and local planning department. Group homes are frequently subject to fire code, building code, and local zoning rules on top of state licensing rules, and these can conflict; sort this out before signing a lease or mortgage. 3. Write your policy and procedure manual. States typically require written policies covering medication management, emergency procedures, resident rights, grievance processes, staff training, and incident reporting before they'll even schedule your licensing inspection. 4. Build your staffing plan. Define shifts, ratios, required certifications (CPR, first aid, medication administration training where required), and background check procedures before you submit your application, not after. 5. Submit your license application and pay the fee. Fee amounts and application forms are set by each state licensing agency and change periodically, so confirm current fees and forms directly with your state's agency rather than relying on any secondhand number. 6. Pass your pre-licensing inspection. This typically covers fire safety, physical plant, and a review of your written policies. Expect the inspector to ask you to walk through specific scenarios (what happens if a resident falls at 2am, what happens during a fire drill). 7. Get licensed, then prepare for ongoing surveys. Most states re-inspect group homes on a recurring schedule (commonly annually, though this varies by state and license type) plus complaint-driven inspections. Building all of this from scratch, state statute by state statute, is the single biggest time sink for new operators. That's the exact gap our $299 State Group Home Licensing Kit is built to close: state-specific policy manual templates, staffing plan frameworks, and application checklists so you're not starting from a blank page. It doesn't replace your state's application or guarantee approval; no one can promise that, and any state can request revisions. It just gets you to a complete, organized submission faster.
how do i start a group home if I have no experience running one?
Lack of direct operating experience isn't automatically disqualifying in most states, but it does put more weight on two things: your written policies and your staffing plan. Licensing agencies are trying to answer one question during review: if something goes wrong at 3am, does this operator have a real plan, not a hope. Practical steps if you're new: work or volunteer in a licensed home in your target population for a few months before applying, if you can. Many states also require a designated "administrator" or "qualified professional" to hold specific credentials or experience hours, so check your state's administrator qualification rules early, this can be the single biggest bottleneck in the whole process. Hire or partner with someone who has direct experience even if you're the owner. States generally care less about your personal resume and more about whether the person actually running daily operations meets the qualification requirements written into the regulations.
what questions should I ask before choosing or licensing a group home?
For families touring a home: What's your current license status and can I see the most recent inspection report? What's the staff-to-resident ratio right now, not on paper? How is medication managed and who administers it? What happens if my family member needs a higher level of care than this facility provides, is there a discharge or transfer plan? What's included in the base rate, and what costs extra? For operators preparing to license a home: Which state agency licenses this population, and what's their current application and fee schedule? What are the minimum staffing ratios and qualifications for direct care staff? What physical plant and fire code requirements apply to a building this size? What's the required content of my policy manual, and does the state provide a template or checklist? In both cases, the answer to "can I see it in writing" is the test. Verbal reassurance is not a policy.
Frequently asked questions
what is assisted living?
Assisted living is a licensed residential care option for people, often older adults, who need help with daily activities like bathing, dressing, and medication management, but not full-time skilled nursing care. It's regulated at the state level; there's no single federal assisted living license, so services and rules vary by state.
what is a group home?
A group home is a licensed residence where a small group of people, often 4 to 16 depending on state rules, live together with paid staff support. Group homes serve different populations, including people with intellectual/developmental disabilities, mental health needs, substance use recovery, and seniors, depending on the license type held.
what is an assisted living facility?
An assisted living facility is the licensed building where assisted living services are delivered, ranging from a small converted home with a handful of residents to a large community with 100+ units. It's licensed and regulated by the state, not the federal government, according to CMS guidance on assisted living.
what is assisted living vs nursing home?
Assisted living helps with daily activities in a home-like setting and is licensed only at the state level. Nursing homes provide 24-hour skilled nursing care and, if they accept Medicare/Medicaid, must meet federal requirements under 42 CFR Part 483. Medicare can cover short nursing home stays after hospitalization; it does not cover assisted living room and board.
what does assisted living provide?
Assisted living typically provides help with bathing, dressing, and mobility, medication reminders, meals, housekeeping, laundry, 24-hour staff availability, and social activities. It generally does not provide ongoing skilled nursing, ventilator care, or intensive rehab; those require a nursing home or a higher licensed level of care.
how do I start a group home?
Choose your population and license category, confirm zoning and building code requirements with local and state agencies, write required policy manuals covering medication, emergencies, and grievances, build a compliant staffing plan, submit your license application and fee to your state licensing agency, and pass a pre-licensing inspection before opening.
does Medicare cover assisted living facilities?
No. Medicare.gov states that room and board for custodial or assisted living care is not covered. Medicare Part A can cover a short skilled nursing facility stay after a qualifying hospital stay, but that's a separate nursing home benefit, capped at 100 days per benefit period with cost-sharing after day 20.
what is the difference between assisted living and nursing home?
Assisted living serves people who need help with daily activities but not constant medical care, and it's regulated only at the state level. Nursing homes provide 24-hour skilled nursing, treat more medically complex residents, and if Medicare/Medicaid certified, must follow federal conditions under 42 CFR Part 483 in addition to state rules.
what should I look for when touring a group home?
Check for a posted current license, ask to see the last state inspection report, ask about actual staff-to-resident ratios on each shift, review a sample individualized care plan, check exits and bathroom safety features, and watch how staff interact with residents during a meal or activity.
does Medicaid pay for group homes or assisted living?
Medicaid usually doesn't cover room and board, but many states use Home and Community-Based Services waivers under Section 1915(c) of the Social Security Act to pay for care services inside licensed group homes or assisted living settings. Waiver availability, waitlists, and covered services vary significantly by state; confirm with your state Medicaid agency.
how much does it cost to start a group home?
Startup costs vary hugely by state, population served, and property (owned vs leased, new build vs conversion), covering licensing fees, background checks, fire code upgrades, staffing, and insurance. There's no single national figure; confirm current license fees with your state licensing agency and build a property-specific budget before committing to a lease.
do group home staff need special certification?
Requirements vary by state and population, but common requirements include CPR/first aid certification, medication administration training, background checks (often through a state or FBI database), and sometimes specific hours of training in the population served (IDD, mental health, or aging services). Check your state licensing agency's staff qualification rules directly.
can a group home operator have no prior experience?
Many states allow new operators without direct experience, but they usually require the designated administrator or qualified professional on staff to meet specific credential or experience requirements. Working or volunteering in a licensed home in your target population before applying is a practical way to close the experience gap.
Sources
- Medicaid.gov, Home & Community-Based Services: State variation in how residential care settings like group homes and adult foster care are licensed and named
- Medicare.gov, Long-Term Care coverage: Assisted living facilities are licensed and regulated by the state, and Medicare does not cover assisted living room and board
- Medicare.gov, Skilled Nursing Facility Care coverage: Medicare Part A coverage rules for skilled nursing facility stays, including the 100-day benefit period and cost-sharing after day 20
- eCFR, 42 CFR Part 483 Subpart B: Federal requirements for long-term care (nursing) facilities participating in Medicare and Medicaid
- Social Security Administration, Section 1915(c) of the Social Security Act: Legal basis for Medicaid Home and Community-Based Services waivers that can fund care in group home and assisted living settings
- 42 CFR Section 483.35, Nursing services: Federal staffing requirement that Medicare/Medicaid-certified nursing facilities provide sufficient nursing staff to meet residents' needs