Last updated 2026-07-26
TL;DR
Assisted living facilities are typically larger, apartment-style communities with 24/7 staff, dining halls, and activity programs. Residential care homes (sometimes called board and care homes or group homes) are smaller, house-like settings, usually 6-20 residents, with more personal attention. Neither is a nursing home, and Medicare generally does not pay for either one's room and board.
What is assisted living?
Assisted living is a licensed residential care option for older adults who need help with daily activities like bathing, dressing, medication reminders, and meals, but who don't need the round-the-clock skilled nursing care a nursing home provides. Most assisted living facilities look and feel like apartment buildings or campuses, with private or semi-private units, common dining rooms, and organized activities. The federal government does not license or directly regulate assisted living. Each state writes its own rules, which is why the same type of building might be called an "assisted living facility" in Florida, a "residential care facility for the elderly" in California, or an "adult foster home" in Oregon. The National Center for Health Statistics counted 28,900 residential care communities in the United States in 2018, with an average of 33 beds each [1]. Staffing in assisted living usually includes caregivers or aides on site 24 hours a day, plus a licensed nurse who consults or works part-time depending on the state's rules. Very few states require a registered nurse on site around the clock. If you're comparing specific facilities, assisted living facilities near you will have their own staffing ratios posted or available on request, and you should ask for the state inspection report before signing anything.
What is a group home?
A group home is a small residential setting, often a converted single-family house, where a handful of residents live together and receive support with daily living. The term gets used loosely, but in licensing terms it usually means a home serving somewhere between 4 and 16 people, staffed by caregivers rather than clinical nursing staff. Group homes serve different populations depending on the state and the specific license type: seniors who need help with activities of daily living, adults with intellectual or developmental disabilities, people in mental health recovery, or people in addiction recovery. A senior-focused group home is often licensed under the same category as "residential care home," "adult family home," or "board and care home," depending on the state. The defining feature of a group home, compared to assisted living, is scale. You're looking at a house, not a campus. That usually means fewer staff on shift at once, a more homelike environment, and (often, though not always) a lower monthly cost than a larger assisted living community.
What is an assisted living facility, exactly?
An assisted living facility is the licensed building or campus where assisted living services happen. States define the term in statute, and the definition usually spells out what level of care is and isn't allowed. Florida, for example, defines an assisted living facility in its statutes as a facility that provides housing, meals, and one or more personal services for a period exceeding 24 hours to one or more adults not related to the owner [2]. Most states require the facility to hold a specific license type before admitting residents, and that license dictates the maximum number of residents, the staffing ratios, the medication management rules, and the physical building requirements (things like sprinkler systems, minimum room size, and number of bathrooms per resident). If you're building out a facility from scratch, assisted living facility licensing pages by state are the place to start, because building code and life-safety code requirements are usually tied directly to the licensed capacity.
What is assisted living vs nursing home?
| Typical resident | Needs help with ADLs, mostly independent | Needs daily medical/skilled care |
|---|---|---|
| Federal oversight | None (state-licensed only) | CMS-certified under 42 CFR Part 483 [3] |
| RN on site | Varies by state, often part-time | Required 8 hrs/day, 7 days/week [3] |
| 2023 median annual cost | $64,200 [4] | $111,325 (semi-private) [4] |
| Medicare pays room and board? | No | Only up to 100 days post-hospitalization, and only partially [5] |
Assisted living and nursing homes both provide housing and support, but they sit at different points on the care spectrum. Assisted living is for people who are largely independent but need help with a few daily tasks. Nursing homes (also called skilled nursing facilities) are for people who need daily medical care, rehabilitation after surgery or a hospital stay, or supervision for complex medical conditions. The regulatory difference matters as much as the clinical one. Nursing homes are certified by the Centers for Medicare & Medicaid Services (CMS) under federal rules found at 42 CFR Part 483, and they must have a registered nurse on duty at least 8 consecutive hours a day, 7 days a week, per federal requirements [3]. Assisted living facilities have no federal license or certification requirement at all; oversight is entirely state-based. Cost also differs, generally in nursing homes' disfavor. Genworth's 2023 Cost of Care Survey put the national median annual cost of assisted living at $64,200, compared to $111,325 for a semi-private room in a nursing home and $127,750 for a private room [4]. Medicaid coverage differs too, and that's covered in its own section below. | Feature | Assisted Living | Nursing Home |
What does assisted living provide?
Assisted living generally provides a private or shared living space, three meals a day, housekeeping and laundry, help with activities of daily living (bathing, dressing, toileting, transferring), medication management or reminders, social and recreational activities, and 24-hour staff availability for emergencies. What it does not typically provide is skilled nursing care, ventilator support, wound care beyond basic first aid, or IV medication administration, though some states allow "enhanced" or "limited nursing" license tiers that expand what a facility can legally do. Ask specifically what license tier a facility holds, since "assisted living" isn't one uniform standard even within a single state. Most facilities also charge in tiers: a base rate covers room, board, and a baseline level of care, and then add-on fees apply as a resident's needs increase (extra help with mobility, incontinence care, memory care supervision). Genworth's survey methodology assumes a private, one-bedroom unit at the base care level, so real costs for someone needing more help run higher than the median figure [4].
What is the difference between assisted living and residential care homes?
The core difference is size and setting, not the type of care provided. Assisted living facilities tend to be larger, purpose-built buildings with dozens or even hundreds of units, professional dining services, and dedicated activity staff. Residential care homes are smaller, often literally a house on a residential street, serving somewhere in the range of 4 to 20 residents depending on state licensing caps. Staffing ratios in smaller homes tend to be tighter on paper (fewer residents per caregiver), though a lot depends on the individual operator. Some families prefer the residential care home model precisely because it feels less institutional. Others prefer larger assisted living communities because they offer more amenities: on-site physical therapy, beauty salons, larger dining rooms, and more social programming. Licensing categories overlap in confusing ways. California licenses both large assisted living-style buildings and small board and care homes under the same overarching "Residential Care Facility for the Elderly" license type, differentiated mainly by bed count and staffing requirements [6]. Washington State licenses small adult family homes (up to 8 residents) separately from larger assisted living facilities under different chapters of its administrative code [7]. Always confirm with your state licensing agency which category a specific home falls under, because the license type determines the inspection standards and the resident rights that apply.
Does Medicare cover assisted living facilities?
No. Medicare does not cover the cost of room and board at an assisted living facility or a residential care home, under any circumstance. CMS is explicit about this: Medicare Part A and Part B do not pay for long-term custodial care, which is the category assisted living falls into [5]. What Medicare will cover, even for someone living in an assisted living facility, is medically necessary services delivered there: doctor visits, physical therapy ordered by a physician, durable medical equipment, and home health services if the person qualifies under Medicare's home health benefit. The housing and personal care costs themselves are the resident's or family's responsibility, paid out of pocket, through long-term care insurance, or in some states through a Medicaid waiver. Medicaid is a different story, though it's not simple either. Medicaid does not pay for room and board in assisted living in most states, but many states use a Home and Community-Based Services (HCBS) waiver, authorized under Section 1915(c) of the Social Security Act, to cover the personal care and supportive services piece for eligible low-income residents [8]. Medicaid.gov's HCBS page confirms that states can use these waivers to pay for services "in home and community-based settings" as an alternative to institutional care [9]. The resident (or their family) still typically has to cover the room and board portion separately, often through Supplemental Security Income or a state supplement program. Coverage, eligibility, and waiver availability vary enormously by state, so confirm with your state Medicaid agency and your state licensing agency before assuming coverage exists.
How do I start a group home?
Starting a group home for seniors involves five broad steps, though the exact order and paperwork differ by state: pick your license category, secure a compliant property, write your policy and procedure manuals, hire and train staff, and pass your pre-licensing inspection. First, contact your state licensing agency (usually the Department of Health, Department of Social Services, or Department of Aging, depending on the state) to confirm which license category fits your planned resident population and home size. Second, check local zoning; many states have "reasonable accommodation" or group home protections under fair housing law, but zoning compliance is still handled at the county or city level and it's worth confirming before you sign a lease or mortgage. Third, write your policy and procedure manual covering medication management, emergency response, resident rights, admission and discharge criteria, and staff training, since most states require this manual as part of the license application packet. Fourth, build your staffing plan against your state's minimum ratios. These vary by shift, resident acuity, and total bed count, so confirm the exact numbers with your licensing agency rather than assuming a national standard exists. Fifth, schedule your pre-licensing inspection, which typically checks life-safety code compliance, kitchen and bathroom requirements, resident room square footage, and your written policies against what's on paper. Budget for the license application fee itself, which is a state-set amount that varies widely, plus separate fire marshal and health department inspection fees in most jurisdictions. If you want a structured way to pull together the policy manuals, staffing plans, and application checklists this process requires, the $299 State Group Home Licensing Kit is built specifically to organize that paperwork by state, though the state agency itself is always the final authority on what your application needs.
How do I start a group home if I've never operated a care facility before?
Most states do not require prior ownership experience to get licensed, but nearly all of them require a designated administrator or manager to hold specific qualifications: a minimum age (often 21), a clean background check, a certain number of hours of state-approved training, and sometimes a separate administrator's license or certification exam. If you personally don't meet the administrator qualifications, you can often hire a qualified administrator to run daily operations while you own the business, though the licensing agency will still vet that person's credentials as part of your application. Some states, like Texas, require assisted living facility administrators to be licensed separately through a state Health and Human Services administrator licensing program with its own continuing education requirements [10]. Realistically, the biggest first-time-operator mistakes aren't about experience. They're about underestimating timeline and cash flow. Licensing review can take anywhere from a few weeks to several months depending on the state and how complete your initial application is, and you'll be paying rent or mortgage, insurance, and staff wages before you're allowed to admit your first resident. Build a six-month runway into your budget, not a two-month one.
How does zoning affect where I can open a residential care home?
Zoning is a separate approval process from state licensing, and it trips up more first-time operators than the license application itself. A property zoned single-family residential may or may not allow a group home use, and the answer depends on your local zoning code, the number of residents you plan to serve, and whether your state has fair housing protections that limit how localities can restrict group homes. The federal Fair Housing Act (42 U.S.C. § 3604) prohibits municipalities from treating group homes for people with disabilities less favorably than similar unrelated-person households of the same size, and HUD's guidance confirms that zoning ordinances cannot single out group homes for stricter rules than apply to families of the same size . That protection has real limits though: it applies to group homes serving people with disabilities (which includes many senior care homes given age-related disabilities), and localities can still apply neutral rules like occupancy limits, parking requirements, and fire code, as long as those rules apply evenly. Before signing a lease or purchase agreement, call your local zoning or planning department and ask directly whether your intended use and resident count is permitted, conditional, or prohibited in that zone. A conditional use permit process can add months to your opening timeline, so build that into your project schedule from day one.
What should families compare when choosing between assisted living and a residential care home?
Families comparing the two options should look past the label and compare four concrete things: license type and inspection history, staff-to-resident ratio, monthly cost breakdown (base rate plus likely add-ons), and the actual level of medical support available on site. Ask to see the facility's most recent state inspection report. Nearly every state posts these publicly or will provide them on request, and they'll show any cited deficiencies, from medication errors to staffing shortfalls. Ask what happens if the resident's care needs increase, since some facilities require a move to a higher level of care (or a different building entirely) once a resident needs more help than the license allows. Ask about staff turnover and training hours, since high turnover in either setting is a real predictor of care quality problems, even though it's rarely something facilities volunteer without being asked. Size genuinely changes the day-to-day experience. A resident in a 6-person home usually gets more one-on-one attention and a quieter environment; a resident in a 150-unit assisted living campus usually gets more amenities, more social opportunities, and more built-in redundancy if one staff member calls out sick. Neither is objectively better. It depends on the person.
Frequently asked questions
What is assisted living?
Assisted living is a licensed, state-regulated form of housing for older adults who need help with daily activities like bathing, dressing, and medication reminders, but not full-time skilled nursing care. It typically includes meals, housekeeping, and 24-hour staff availability, delivered in apartment-style buildings or smaller residential settings depending on the state and provider.
What is a group home?
A group home is a small residential care setting, usually a house serving somewhere between 4 and 16 residents, where people receive help with daily living from on-site caregivers. Group homes can serve seniors, people with intellectual or developmental disabilities, or people in mental health or addiction recovery, depending on the license type.
What is an assisted living facility?
An assisted living facility is the licensed building where assisted living care and services are legally provided. States define the term in statute and set the maximum resident count, staffing requirements, and building code standards tied to that specific license, which is why requirements differ from state to state.
What is the difference between assisted living and a nursing home?
Assisted living serves people who are mostly independent but need help with some daily tasks, and it has no federal certification requirement. Nursing homes serve people needing daily skilled medical care and must be CMS-certified under 42 CFR Part 483, with a registered nurse on duty at least 8 hours a day, 7 days a week.
Does Medicare cover assisted living facilities?
No. Medicare does not pay for room, board, or custodial care at an assisted living facility. It may cover specific medical services delivered there, like doctor visits or physical therapy, but the housing and personal care costs are the resident's responsibility or, in some states, partly covered through a Medicaid HCBS waiver.
How do I start a group home?
Contact your state licensing agency to pick the right license category, confirm local zoning allows the use, secure a compliant property, write your policy and procedure manuals, build a staffing plan meeting your state's ratios, and schedule your pre-licensing inspection. Fees, timelines, and requirements vary significantly by state.
How much does assisted living cost compared to a nursing home?
Genworth's 2023 Cost of Care Survey put the national median annual cost of assisted living at $64,200, compared to $111,325 for a semi-private nursing home room and $127,750 for a private room. Actual costs vary a lot by region and by the resident's care needs.
Is a residential care home the same as assisted living?
They provide similar services but differ mainly in scale. Assisted living usually means a larger, apartment-style building with dozens of units. A residential care home is typically a smaller house-style setting serving a handful of residents. Some states license both under the same overarching category, differentiated by bed count.
What does assisted living provide that home care doesn't?
Assisted living provides 24-hour staff availability, a built-in social community, on-site meals, and a structured environment, which home care in a private residence doesn't automatically include. Home care can offer more one-on-one time but usually isn't staffed around the clock unless a family pays for that level separately.
Can I start a group home with no experience running a facility?
In most states, yes, as long as you hire a qualified administrator who meets the state's age, training, and background check requirements. You'll still need to pass licensing review and inspections, and you can hire someone experienced to manage daily operations if you don't meet administrator qualifications yourself.
Does Medicaid pay for assisted living or group homes?
Medicaid generally doesn't cover room and board in assisted living, but many states use a Home and Community-Based Services waiver under Section 1915(c) of the Social Security Act to cover personal care services for eligible low-income residents. Coverage and eligibility rules vary by state, so confirm with your state Medicaid office.
How long does it take to get a group home license?
Timelines vary by state and by how complete the initial application is, ranging from a few weeks to several months. Building inspections, background checks for staff, and zoning approval can each add time, so it's realistic to budget at least a few months from application to opening day.
What's the difference between board and care homes and assisted living facilities?
Board and care homes are typically smaller residential settings (often under 20 residents) with a homelike feel, while assisted living facilities are usually larger, purpose-built communities with more amenities and dedicated activity staff. Some states use these as separate license categories; others fold both into one licensing framework based on size.
Sources
- CDC National Center for Health Statistics, Long-Term Care Providers and Services Users report: There were 28,900 residential care communities in the U.S. in 2018, averaging 33 beds each
- Florida Statutes, Chapter 429: Florida's statutory definition of an assisted living facility
- CMS, 42 CFR Part 483 (Requirements for States and Long Term Care Facilities): Federal nursing home certification requirements including RN staffing minimums
- Genworth, Cost of Care Survey 2023: 2023 median annual costs for assisted living vs. nursing home care
- Medicare.gov, Long-Term Care coverage page: Medicare does not cover long-term custodial care such as assisted living room and board
- California Department of Social Services, Residential Care Facilities for the Elderly Program: California licenses both large and small assisted living-style homes under the RCFE category
- Washington State Legislature, WAC 388-76 (Adult Family Homes): Washington licenses adult family homes up to 8 residents separately from larger assisted living facilities
- Social Security Act, Section 1915(c): Legal basis for Medicaid Home and Community-Based Services waivers
- Medicaid.gov, Home & Community-Based Services 1915(c): States can use HCBS waivers to cover services in home and community-based settings as an alternative to institutional care
- Texas Health and Human Services, Assisted Living Facility Administrator Licensing: Texas requires separate administrator licensing for assisted living facility administrators