Last updated 2025-06-01
TL;DR
Assisted living is a state-licensed residential setting where seniors get help with bathing, meals, medication, and daily activities, but not 24/7 skilled nursing care. A group home is usually a smaller version of the same idea, often 3 to 10 beds in a converted house. Medicare doesn't pay for either one's room and board; Medicaid may cover some care costs through a state waiver program.
What is assisted living?
Assisted living is a state-licensed residential option for older adults who need help with daily activities like bathing, dressing, or taking medication. But residents don't need the round-the-clock skilled nursing care you'd find in a nursing home. Residents typically have their own apartment or room, eat meals in a shared dining room, and get help from staff on a schedule built around their actual needs. It sits in the middle of the senior care spectrum: more support than independent living, less medical intervention than a nursing home. The median assisted living resident in the US is 87 years old, according to data compiled by the National Center for Assisted Living [1], and most residents need help with two or three activities of daily living, things like bathing, dressing, or getting in and out of a bed or chair safely. Every state licenses assisted living differently. Some states use the term "assisted living facility." Others use "residential care facility," "personal care home," or "adult family home," depending on the size of the building and the level of care provided. The label matters less than the license category itself, because that category determines staffing ratios, admission and discharge rules, and exactly what level of care staff are legally allowed to give.
What is an assisted living facility, and how is it licensed?
An assisted living facility (often shortened to ALF) is the licensed building or program where assisted living services actually happen. It's a business, licensed by a state agency, usually the state health department or a department of social or human services, that provides housing plus personal care to people who can't safely live alone anymore. It's a licensed business, more than a nice house with a sign out front. Getting licensed as an assisted living facility means meeting requirements around the physical building (fire sprinklers, exit width, minimum square footage per resident), staffing (awake night staff in some states, medication training, background checks), and paperwork (resident care plans, incident reports, admission agreements). Confirm with your state licensing agency for the exact facility class names and bed-count thresholds that apply; a 6-bed home and a 100-bed community are often licensed under completely different rules, even in the same state. If you're comparing options for a family member, or researching how to open one, start with your state's official list of licensed assisted living facilities. Every state publishes one, and it's the only reliable way to confirm a facility (or your own project) actually holds a current license rather than just calling itself "assisted living." For a deeper walk-through of these categories, see our guide to the assisted living facility licensing process.
What is a group home, and how is it different from assisted living?
A group home is a small residential home, usually in an ordinary house in an ordinary neighborhood, licensed to provide care and supervision to a small number of residents, often somewhere between 3 and 10 depending on the state. For seniors specifically, a group home is sometimes called an adult family home, a board and care home, or a residential care home. The core difference isn't really the services provided. It's the scale. Assisted living facilities range from a converted house to a 150-unit community with a commercial kitchen and an activities director. A group home almost never gets that big on purpose; it stays home-sized, with a live-in or on-site caregiver, family-style meals, and a much higher staff-to-resident ratio than most large facilities run. There are more than 28,900 licensed residential care communities in the US according to CDC's National Study of Long-Term Care Providers [2], and a large share of those are exactly this small, home-based model, not the big campuses people picture when they hear "assisted living." Licensing categories vary a lot by state, and this is where first-time operators get confused most often. Some states license "assisted living" as one single category covering everything from a 4-bed home to a high-rise. Others split it into tiers based on resident count and acuity. Confirm with your state licensing agency which category your building size and target population actually fall into before you build a business plan around the wrong one.
What does assisted living actually provide?
Assisted living provides help with the tasks that make independent living unsafe on your own: bathing, dressing, grooming, medication reminders or administration, meals, housekeeping, laundry, and transportation to appointments. Most facilities also provide 24-hour staff availability, an emergency call system, and some level of organized social activity. What it doesn't typically provide is skilled nursing care. IV therapy, wound care beyond basic first aid, ventilator management, or complex rehab after a stroke or surgery usually require a nursing home or a home health agency layered on top of assisted living, not the assisted living staff themselves. A typical assisted living service package includes:
- Help with 2 to 3 activities of daily living (ADLs) on average, per National Center for Assisted Living data [1]
- Three meals a day plus snacks
- Medication management or administration, depending on state rules and staff licensure
- Housekeeping and laundry
- Staff on site 24 hours, though not always awake overnight in smaller homes
- Some organized social or recreational programming Some families patch together a similar level of support at home instead of moving into a facility, through paid caregivers, sometimes marketed as assisted living at home services. Whether medication administration, versus just reminders, is allowed depends entirely on your state's medication aide and nurse delegation rules, and it's worth reading that section of your state's code line by line before assuming staff can do something.
Assisted living vs nursing home: what is the real difference?
| Care type | Personal care, ADL help | Skilled nursing, medical treatment | |
|---|---|---|---|
| Staffing | Caregivers, medication aides, some LPNs | RNs and LPNs on duty around the clock | |
| Medicare certified? | No | Yes, for eligible short-term stays [3] | |
| Typical setting | Apartment or private room, home-like | More clinical, hospital-adjacent | |
| Length of stay | Often years | Short-term rehab or long-term custodial care | |
| Regulated by | State licensing agency | State licensing agency plus CMS Medicare certification | A resident can move between the two as needs change. It's common for someone to live in assisted living for years, transfer to a nursing home temporarily after a hospital stay for rehab, then either return to assisted living or stay in the nursing home long-term if their care needs stay high. That back-and-forth is normal, not a sign the original placement was wrong. |
The real difference between assisted living and a nursing home comes down to the level of medical care and who is legally allowed to provide it. Assisted living is personal care and supervision. A nursing home, also called a skilled nursing facility or SNF, provides 24-hour licensed nursing care and is usually Medicare and Medicaid certified for residents who need ongoing medical treatment, more than help getting dressed [3]. Here's how the two compare side by side. | Feature | Assisted living | Nursing home (SNF) |
What does assisted living cost, and how does that compare to nursing homes?
Assisted living isn't cheap, and it's not getting cheaper. Assisted living costs a national median of about $5,350 a month, compared to roughly $8,669 a month for a semi-private nursing home room and $9,733 for a private nursing home room, according to Genworth's Cost of Care Survey [4]. A home health aide, for a typical part-time schedule, runs closer to $6,292 a month in the same survey. These are national medians, and the real number for any specific home swings hard by state, and even by zip code within a state. Rural board and care homes can run well under the national median. Assisted living in a high cost coastal metro can run double it. If you're pricing out care for a family member, treat any national average as a starting point for calling actual senior assisted living facilities near me, not as a final number. Most assisted living costs come out of pocket, from long-term care insurance, or from family savings. That's the part people find out too late, which leads directly into the next question.
Does Medicare cover assisted living facilities?
No. Medicare does not cover the cost of assisted living, including room and board, personal care, or supervision. Medicare.gov states that Medicare "doesn't cover long-term care" when custodial care, meaning help with daily activities, is the only kind of care a person needs [5]. Medicare will still pay for specific medical services a person receives while living in assisted living, like a doctor's visit, physical therapy ordered by a doctor, or durable medical equipment. It just won't pay the facility's monthly rate for housing, meals, or caregiving. This trips up a lot of families who assume Medicare works the same way it does for a hospital stay or a short nursing home rehab stint. It doesn't, for assisted living, not even partially. Medicare Part A does cover a limited number of days in a skilled nursing facility after a qualifying hospital stay, under specific conditions [3]. That's a different benefit entirely, time-limited and tied to skilled rehab, not a long-term living arrangement.
Does Medicaid pay for assisted living or a senior group home?
Sometimes, but it almost never pays for room and board. Medicaid can cover personal care services delivered inside an assisted living facility or a licensed group home through a state's Home and Community-Based Services (HCBS) waiver, if that state offers one and the resident qualifies both financially and medically [6]. Medicaid.gov describes these programs as letting people "receive services in their own home or community rather than an institution," which includes many licensed assisted living and group home settings [6]. Room, board, and rent are still almost always the resident's own responsibility, paid from Social Security, a pension, savings, or in some states a small state supplemental payment. Which services get covered, how long the waiver waitlist runs, and whether a specific group home even accepts Medicaid waiver clients varies enormously by state, and long-term services and supports programs generally require a separate application from regular Medicaid enrollment . Some state waitlists run for years. Confirm current waiver availability, income and asset limits, and provider enrollment rules with your state Medicaid agency and your state licensing agency before assuming Medicaid will cover any specific placement.
How do you start a group home for seniors?
Starting a group home for seniors means working through licensing, staffing, and property requirements roughly in this order, though states sequence the paperwork differently: 1. Pick your population and license category. A senior-focused adult family home has different rules than one serving adults with intellectual or developmental disabilities. Confirm with your state licensing agency which category fits a home for seniors needing personal care versus one needing dementia-specific care, since dementia care often triggers extra staffing and training requirements. 2. Set up your business entity and get any required general business licenses. 3. Find a property that meets zoning and building code for residential care, more than a house you happen to like. More on that below. 4. Write your policy and procedure manual: admission and discharge criteria, medication management, emergency and disaster plans, resident rights, staffing schedules, infection control, and abuse or neglect reporting. 5. Build your staffing plan: minimum staff-to-resident ratios (varies by state and by shift), required background checks, required training hours (first aid, CPR, medication administration training if applicable), and a plan for awake overnight staff if your state requires it. 6. Submit your license application and fee to your state licensing agency, along with your policy manual, staffing plan, floor plan, and fire marshal sign-off. 7. Pass your pre-licensing inspection, which typically checks life safety code, resident bedroom and bathroom minimums, food service sanitation, and whether your written policies actually match daily practice. 8. Get any required liability and property insurance in place before your license is issued, not after. This is where a lot of first-time operators either overspend on a consultant or underprepare and get sent back for revisions. A state-specific packet laying out your state's actual forms, staffing ratios, and policy manual requirements, instead of generic advice, saves real time here. That's what our $299 State Group Home Licensing Kit is built to do, at /licensing-kit-builder, but even without buying anything, working through your state licensing agency's own checklist, start to finish, in order, is the difference between a smooth review and months of back-and-forth.
What staffing and inspections does a senior group home need?
Staffing rules for a senior group home almost always specify a minimum caregiver-to-resident ratio, a requirement for awake staff overnight in some states (not all, especially in smaller homes), and specific training hours before a caregiver can work unsupervised. Background checks, usually through your state's criminal history repository and often a federal check too, are close to universal, and a failed or pending check almost always blocks employment in this field. Inspections happen on a few different timelines: a pre-licensing inspection before you open, a full survey inspection on a set schedule after that (commonly annual, though this varies by state and by any prior violations), and unannounced complaint investigations if anyone files a complaint against the home. Check your state licensing agency's published inspection checklist, since most states now post one online, for the exact schedule and standards that apply to your license category. The most common citations in senior residential care inspections tend to cluster around medication administration records, staff training documentation, and fire or life safety issues like blocked exits or dead smoke detector batteries. None of that is exotic. It's mostly about whether your paperwork matches your actual practice, consistently, every day, more than on the day the inspector shows up.
Can you legally operate a group home in a residential neighborhood?
Yes, in most cases, and federal law backs that up. The Fair Housing Act treats a group home for people with disabilities, which includes many senior care homes depending on resident count and licensure, as a residential use, not a commercial one, for zoning purposes. HUD's overview of the Fair Housing Act confirms that housing discrimination protections extend to reasonable accommodation requests, including local zoning decisions that affect group homes for people with disabilities [7]. That doesn't mean zoning is a non-issue. Cities still regulate things like off-street parking, occupancy limits tied to building and fire code (not disability status), and whether a given residential zone allows a licensed care facility at all versus requiring a conditional use permit. A single-family home converted into a licensed group home with 5 or 6 residents usually clears zoning fine in most residential districts. A facility assisted living model built for 20 or more residents almost always needs a different, more commercial zoning designation instead. Before signing a lease or buying a property, call your local zoning or planning department and ask directly whether your specific bed count and license category are allowed by right, allowed with a conditional use permit, or not allowed at all in that zone. Skipping that call is one of the more expensive mistakes new operators make, because a fire marshal or building inspector finding a zoning conflict after you've already renovated a kitchen is a very costly do-over.
Is a group home or an assisted living license the right fit for you?
If you're picturing a small home with a handful of residents and a family-style feel, a group home or adult family home license is probably the right category to research first. If you're picturing a larger community with its own dining room, activities calendar, and dozens of residents, you're looking at assisted living facility licensure instead, with a different scale of staffing, capital, and regulatory oversight. Neither path is faster or easier by default. A small group home has lower construction costs but often stricter per-resident staffing ratios. A larger assisted living facility spreads staffing costs over more residents but comes with a heavier building code and fire safety lift, plus a longer, more document-heavy license review. Whichever path fits, the actual work is the same three pieces: property that meets code and zoning, a policy manual matching your state's specific requirements, and a staffing plan you can actually run on day one. For state-specific requirements as you move from research toward an actual application, our State Group Home Licensing Kit packages the forms, sample policy manual, and staffing worksheets by state for a flat $299, one time, no subscription, at /licensing-kit-builder. It won't get an application approved faster than anyone else's, no one can honestly promise that, but it does mean you're not starting from a blank page.
Frequently asked questions
What is assisted living?
Assisted living is a state-licensed residential setting for older adults who need help with daily activities like bathing, dressing, or medication, but who don't need 24-hour skilled nursing care. Residents usually have their own room or apartment, get meals and housekeeping, and receive personal care from staff on a set schedule tailored to their needs.
What is a group home?
A group home is a small, home-based residential care setting, usually licensed for somewhere between 3 and 10 residents, located in a regular house in a regular neighborhood. For seniors, it may be called an adult family home or board and care home, and it offers the same kind of personal care as assisted living but at a much smaller scale.
What is an assisted living facility?
An assisted living facility is the licensed building or program, sometimes shortened to ALF, where a state-regulated business provides housing plus personal care to residents who can't safely live alone. It's licensed by a state agency, typically the health department or department of human services, under rules that vary by state and by facility size.
What is the difference between assisted living and a nursing home?
Assisted living provides help with daily activities like bathing and dressing, without 24-hour licensed nursing staff. A nursing home, or skilled nursing facility, provides round-the-clock nursing care and treats residents with ongoing medical needs. Nursing homes are Medicare certified for short-term rehab stays [7]; assisted living facilities generally are not.
What does assisted living provide?
Assisted living provides help with bathing, dressing, grooming, medication management, meals, housekeeping, laundry, transportation, and 24-hour staff availability, plus some organized social activity. It does not typically provide skilled nursing services like IV therapy, complex wound care, or post-surgical rehab, which usually require a nursing home or home health agency instead.
Does Medicare cover assisted living facilities?
No. Medicare does not cover assisted living room, board, or personal care costs, because it classifies this as custodial care, which it explicitly excludes [1]. Medicare may still pay for specific medical services, like a doctor visit or physical therapy, that a resident receives while living in assisted living, but not the facility's monthly rate itself.
Does Medicaid cover assisted living or group homes?
Sometimes, through a state Home and Community-Based Services (HCBS) waiver that covers personal care services, but almost never room and board [2]. Availability, income limits, and waitlists vary widely by state, and some states have multi-year waitlists. Confirm current waiver rules with your state Medicaid agency before assuming coverage for a specific facility.
How do I start a group home?
Pick your population and license category, set up your business entity, find a property that clears zoning and building code, write a policy and procedure manual, build a staffing plan with required background checks and training, then submit your license application, floor plan, and fees to your state licensing agency and pass the pre-licensing inspection before opening.
How much does assisted living cost per month?
The national median is about $5,350 a month, according to Genworth's Cost of Care Survey [5]. Actual costs vary a lot by state and metro area, running well below that median in rural areas and well above it in high cost cities. Nursing home care runs considerably higher, at $8,669 to $9,733 a month depending on room type.
How many residents can a senior group home have?
It depends entirely on the state and license category. Many group home or adult family home licenses cap out somewhere between 3 and 10 residents, while larger assisted living facility licenses allow dozens or more. Confirm with your state licensing agency which bed-count threshold applies to your specific license category before you plan a property.
Is a group home the same as a nursing home?
No. A group home provides personal care and supervision in a small, home-like setting, similar to assisted living but smaller. A nursing home provides 24-hour skilled nursing care and is certified by CMS for Medicare-covered short-term rehab stays. A group home is not federally Medicare-certified in the way a nursing home is.
What's the difference between assisted living and independent living?
Independent living is housing for seniors who don't need regular personal care assistance, just a more manageable, amenity-rich living situation. Assisted living adds licensed personal care support, help with daily activities like bathing and medication, that independent living communities are not licensed or staffed to provide.
How long does it take to get a group home license?
Timelines vary widely by state and depend on how quickly your application, floor plan, and staffing plan are complete and whether your pre-licensing inspection passes on the first try. There's no standard or guaranteed timeline; confirm expected processing time directly with your state licensing agency before finalizing a lease or renovation schedule.
Sources
- Medicare.gov, "Long-term care": Medicare doesn't cover long-term custodial care such as assisted living room and board
- Medicaid.gov, "Home & Community-Based Services": HCBS waivers let Medicaid beneficiaries receive services in the community rather than an institution, and may cover personal care in assisted living or group homes
- CDC/NCHS, "National Study of Long-Term Care Providers": There are more than 28,900 licensed residential care communities in the US
- Genworth, "Cost of Care Survey": National median monthly costs: assisted living $5,350, nursing home semi-private $8,669, nursing home private $9,733, home health aide $6,292
- HUD, "Fair Housing Act Overview": Fair Housing Act protections extend to reasonable accommodation and zoning treatment of group homes for people with disabilities
- Medicare.gov, "Skilled nursing facility (SNF) care": Medicare Part A covers a limited number of skilled nursing facility days after a qualifying hospital stay
- Medicaid.gov, "Long-Term Services & Supports": Medicaid long-term services and supports generally require separate application and eligibility rules from regular Medicaid enrollment