Last updated 2026-07-25
TL;DR
A group home for intellectually disabled adults is a licensed residential setting, usually 3 to 8 residents, offering staff support with daily living, often funded through Medicaid HCBS waivers rather than Medicaid itself. Licensing runs through your state IDD or developmental disabilities agency, not the nursing home board.
What is a group home for intellectually disabled adults?
A group home for intellectually disabled adults is a licensed residential home, usually serving somewhere between 3 and 8 people, where staff provide supervision and help with daily living tasks like bathing, medication reminders, meal prep, and transportation. It's not a hospital and it's not a nursing home. Most operate under a state's Intermediate Care Facility for Individuals with Intellectual Disabilities (ICF/IID) rules or, more commonly now, under Home and Community Based Services (HCBS) waiver rules that let people live in smaller, more home-like settings instead of institutions. The federal government has pushed hard on this distinction since 2014, when the Centers for Medicare & Medicaid Services (CMS) finalized the HCBS Settings Rule. That rule requires HCBS-funded residences to be "integrated in, and support full access to, the greater community" and to give residents choice over roommates, visitors, and daily schedules [1]. States had until March 2023 (later extended in some cases) to bring existing group homes into compliance, so if you're licensing a new home today, expect your state application to ask directly about resident rights, lockable doors, and access to the community, more than staffing ratios. Group homes for the intellectually disabled sit in a different regulatory lane than senior assisted living facilities. Assisted living licensing usually runs through a state's aging or health department. IDD group home licensing usually runs through a state's developmental disabilities agency, a division of the disability services department, or in some states, the same department that licenses nursing homes but under a distinct chapter of the code. Confirm with your state licensing agency which division handles IDD group homes before you file anything, because filing with the wrong office is the single most common delay we see in first-time applications.
What is assisted living?
Assisted living is a licensed residential care category built for people, mostly older adults, who need help with daily activities like dressing, bathing, or medication management but don't need the 24-hour skilled nursing care a nursing home provides. It sits between independent living and a nursing facility on the care spectrum. Assisted living communities are licensed at the state level, and every state has its own name for the license (Residential Care Facility, Assisted Living Facility, Personal Care Home, Adult Foster Home) and its own resident capacity and staffing rules. There's no single federal assisted living statute. That's part of why a state-by-state assisted living license guide is more useful than any single national rulebook. Assisted living and IDD group homes overlap in structure (both are residential, both are staffed, both need state licenses) but they serve different populations and answer to different regulators. A person with an intellectual disability who also ages into needing personal care might transition between an IDD group home and a senior assisted living facility, and the paperwork for each is genuinely different.
What is a group home?
A group home is a small, licensed residential setting where a defined number of unrelated people live together and receive some level of staff supervision or support, funded through a mix of Medicaid, state dollars, and sometimes private pay. The term covers a lot of ground: adult foster care homes, IDD residential homes, mental health group homes, substance use recovery residences, and small assisted living homes all fall under the umbrella, but each has its own license type and rules. What makes something a "group home" versus a plain rental house is the license and the service plan. Residents typically have an individualized service plan (sometimes called an ISP or person-centered plan) that spells out the support they need, and the home is subject to state inspection, staffing ratio requirements, and often a fire/life safety inspection separate from the health license. Size matters a lot in this space. Many states cap "group home" licenses at 8 or fewer residents specifically so the home reads, legally and physically, more like a house than an institution. Some states set the cap lower, at 6 or even 4, for IDD-specific licenses. Confirm your state's specific capacity cap with your licensing agency before you sign a lease or make an offer on a property, because zoning and licensing capacity limits don't always match.
What is an assisted living facility (and how is it different from a nursing home)?
| Level of medical care | Non-medical personal care | Skilled nursing, medical care |
|---|---|---|
| Nurse staffing requirement | Set by state, varies | 24-hour licensed nursing required (42 CFR 483.35) [2] |
| Medicare coverage | Not covered | Short-term skilled stays only |
| Medicaid coverage | Partial, via HCBS waiver, services only | Long-term care covered in most states |
| Typical setting | Apartment-style or house-like | Hospital-like, semi-private rooms |
An assisted living facility is a licensed building or set of buildings where residents live in private or semi-private units and receive help with daily activities, medication oversight, and meals, but not skilled nursing care around the clock. A nursing home (skilled nursing facility) is licensed for a higher level of medical care: things like IV therapy, wound care, physical therapy, and 24/7 licensed nursing staff. The practical differences show up in three places: staffing, medical acuity, and payment source. Nursing homes must have a registered nurse on duty for at least 8 consecutive hours a day, 7 days a week, and licensed nursing coverage 24 hours a day, under federal nursing home requirements at 42 CFR 483.35 [2]. Assisted living has no equivalent federal staffing mandate; staffing ratios are set state by state, which is why they vary so widely. Payment source is the other big divider. Nursing homes are routinely covered by Medicare (short-term, post-hospital skilled care only) and by Medicaid (long-term custodial care, in most states). Assisted living is almost never covered by Medicare and is only partially covered by Medicaid, usually through a waiver that pays for services but not room and board. | Feature | Assisted living facility | Nursing home |
What does assisted living provide?
Assisted living provides help with what regulators call "activities of daily living": bathing, dressing, toileting, mobility, and eating, plus medication management, meals, housekeeping, laundry, social activities, and transportation. It does not typically provide skilled nursing, IV therapy, or ventilator care, though some states license a higher "enhanced" or "limited nursing" tier for residents with moderate medical needs. Staff in assisted living are usually certified nursing assistants, personal care aides, or state-certified medication aides, supervised by an administrator who holds a state-issued assisted living administrator license or equivalent credential. The exact required staff-to-resident ratio and the credential requirements differ by state; some states set a minimum awake night staff requirement, others don't specify a ratio at all and instead require the facility to staff "adequately" for resident needs, which is vaguer and puts more weight on your own staffing plan during inspection. For IDD group homes specifically, the support level tends to run higher than typical assisted living, because many residents need help with communication, behavior support plans, and skill-building (habilitation), more than personal care. That's a meaningful difference when you're writing job descriptions and training curricula: an IDD direct support professional (DSP) role usually needs a broader training package than a general assisted living aide role, including things like Positive Behavior Support training and person-centered planning training that many state IDD agencies require by name.
Does Medicare cover assisted living facilities?
No. Medicare does not cover the cost of assisted living, room and board, or personal care in a residential group home setting. Medicare.gov states plainly that Medicare "doesn't cover: Long-term care (also called custodial care)" when that's the only type of care needed [3], and assisted living / group home residential care falls squarely into that custodial category. What Medicare will cover, if a resident of an assisted living or group home also qualifies medically, is short-term skilled nursing facility care after a qualifying hospital stay, home health visits, hospice care, and outpatient medical services like doctor visits and physical therapy delivered wherever the person lives. So a resident can be in a group home and still have Medicare pay for their doctor's visits, home health nurse visits, or hospice, it's just not paying for the roof over their head or the aide who helps them get dressed. Medicaid is the payer that actually funds most group home and assisted living care in the U.S., and it does so almost entirely through Home and Community Based Services waivers authorized under Section 1915(c) of the Social Security Act, or through Section 1115 demonstration waivers in some states [4]. Medicaid.gov describes HCBS as programs that "allow states to provide Medicaid-funded, long-term-services-and-supports in home and community settings rather than institutional settings" [4]. Even then, the waiver usually pays for the service and support component (staffing, habilitation, case management) while the resident (or their SSI check) pays room and board separately, capped in most states at a percentage of the federal SSI benefit rate.
How to start a group home for intellectually disabled adults
Starting a group home for intellectually disabled adults means clearing four separate approval tracks at roughly the same time: business formation, property and zoning, state IDD licensing, and Medicaid HCBS provider enrollment. None of these move fast, and none of them substitute for each other. 1. Form your business entity and get an EIN. Most operators use an LLC or nonprofit corporation, depending on funding goals. 2. Choose and lease or buy a property, then confirm zoning before you sign anything. A property zoned single-family residential may or may not allow a licensed group home; many states have "reasonable accommodation" or fair housing provisions that require municipalities to treat small group homes like ordinary single-family use, but local enforcement varies enormously. Check both your municipal zoning code and your state's group home siting statute. 3. Write your policy and procedure manual, staffing plan, and emergency/fire safety plan. Most state IDD licensing applications require, at minimum: a resident rights policy, medication administration policy, behavior support policy, staff training plan, emergency evacuation plan, and financial solvency documentation showing you can operate the home for a defined startup period (commonly 60 to 90 days of operating reserves, though the exact requirement is state-specific). 4. Apply for your state IDD group home license through your state's developmental disabilities or human services licensing division. Expect a facility inspection (life safety and health) before a license is issued, plus criminal background checks and often a fingerprint-based check for every owner, administrator, and direct care staff member, consistent with federal Medicaid program integrity rules on background checks for HCBS providers [5]. 5. Enroll as a Medicaid HCBS waiver provider, separately from your state license, if you plan to bill Medicaid. This is a second, distinct application, usually through your state Medicaid agency or its managed care contractor, and it typically requires your facility license to already be in hand. 6. Hire and train direct support staff before your inspection, not after. Inspectors commonly want to see completed training records (CPR/First Aid, medication administration certification, abuse reporting training, behavior support training) on day one, not a promise that training is scheduled. Building this paperwork stack from scratch, state by state, is genuinely the slowest part of the process for most first-time operators, which is the whole reason the GroupHomePath State Group Home Licensing Kit exists: a $299 one-time bundle of the policy manual templates, staffing plan templates, and application checklists organized by state, so you're not drafting a medication administration policy from a blank page the week before your inspection.
How do I start a group home (step by step timeline)?
Realistically, budget 6 to 12 months from the decision to open to your first Medicaid-funded resident moving in. That range holds up across most states because it's driven by three slow steps you can't skip: zoning clearance, the facility inspection cycle, and Medicaid provider enrollment processing, each of which commonly takes 30 to 90 days on its own and often can't run in parallel. A rough sequence: months 1-2, entity formation, property search, zoning confirmation. Months 2-4, lease/purchase, renovation to meet fire and life safety code, policy manual drafting. Months 4-6, state license application, inspection, staff hiring and training. Months 6-9, license issuance, Medicaid HCBS provider enrollment, waiver slot assignment for your first resident (this last part depends entirely on your state's waiver waitlist, which in some states runs years long, not months, for new individuals seeking a waiver slot). That waiver waitlist point deserves its own callout: as of recent CMS data, hundreds of thousands of people nationally are on HCBS waiting lists for IDD services, and wait times in some states run multiple years [6]. A licensed, empty group home with no residents assigned to a waiver slot earns nothing, so lining up referral sources (your state IDD case management system, Community Centered Boards, regional centers, or existing waiver-holders looking to move) before you finish construction saves real time.
How much does it cost to start a group home for intellectually disabled adults?
Costs vary enormously by state and by whether you're buying, leasing, or renovating a property, so treat any number here as a planning range, not a quote. Rough categories to budget for: state license application fee (commonly in the low hundreds to low thousands of dollars, confirm the exact fee with your state licensing agency), property renovation to meet fire/life safety code (sprinklers, egress, ADA modifications can run from a few thousand dollars for a compliant existing home to well over $50,000 for a home needing structural work), liability and property insurance, background check and training costs per employee, and 60 to 90 days of operating reserve to cover payroll and rent before Medicaid billing starts generating revenue. Many states require documented proof of financial capacity as part of licensing, more than a business plan narrative. Have your accountant help you build a real cash flow projection covering the gap between opening day and your first Medicaid reimbursement, which can run 30 to 60 days after billing even once a resident is placed.
What's the difference between adult foster care, IDD group homes, and assisted living, in practice?
Adult foster care usually means a small home, often 1 to 5 residents, licensed under a state's adult foster care statute, frequently operated out of the licensee's own residence. IDD group homes are usually larger (3 to 8 residents), staffed by shift workers rather than a live-in family, and licensed under the state's developmental disabilities code. Assisted living facilities can range from small houses to large apartment-style buildings with 100+ units, licensed under the state's aging/health department code. The population served drives most of the practical differences. IDD group home residents often need long-term habilitation support (skill building, behavior support, community integration goals) that's built into their individualized service plan and reassessed regularly. Assisted living residents, more often older adults, need help because of age-related physical decline, and their care plans focus more on personal care and medical monitoring than skill development. If you're weighing which license type fits your project, our comparison of assisted living facilities against other residential care license types walks through capacity, staffing, and funding differences side by side, and is worth reading before you commit to a property or a target population.
What policies does a licensed IDD group home need in place?
At minimum, expect your state to require written policies covering: resident rights and grievance procedures, medication administration and storage, behavior support and restraint/seclusion prohibitions or limits, abuse/neglect reporting (mandatory reporter training for staff), emergency preparedness and evacuation, infection control, staff training and supervision, admission and discharge criteria, and financial management of resident funds if your home handles any resident money. The HCBS Settings Rule adds specific resident-choice requirements on top of the basics: residents must be able to control their own schedule, have privacy in their bedroom (including a lockable door, with limited documented exceptions), choose their roommate to the extent possible, and have access to food at any time [1]. If your state's IDD waiver funds your home, your policy manual needs to demonstrate compliance with these choice and access provisions specifically, more than general health and safety language, because CMS has been actively enforcing this rule in state waiver renewals. Homes serving both IDD and senior populations, or considering a pivot toward senior assisted living facilities near me style referral marketing down the road, should keep in mind that a policy manual built for IDD residents (heavy on habilitation and behavior support) won't automatically satisfy an assisted living inspector looking for personal care and fall-risk protocols. Different license, different manual.
Frequently asked questions
What is assisted living?
Assisted living is a licensed residential care option for people, usually older adults, who need help with daily activities like bathing, dressing, or medication management but don't need 24-hour skilled nursing care. It's licensed state by state, with no single federal assisted living statute, so rules on staffing and resident capacity vary widely across states.
What is a group home?
A group home is a small, licensed residential setting, commonly housing 3 to 8 unrelated residents, where staff provide supervision and support based on each resident's individualized service plan. Group homes exist for people with intellectual disabilities, mental illness, substance use recovery needs, and for older adults, each under a different state license.
What is an assisted living facility?
An assisted living facility is a licensed building where residents get help with daily living tasks and medication oversight but not around-the-clock skilled nursing care. It differs from a nursing home in staffing requirements, medical acuity level, and how it's paid for, since Medicare generally doesn't cover it and Medicaid covers it only partially through HCBS waivers.
What is assisted living vs nursing home?
Assisted living provides non-medical personal care help in a home-like setting; nursing homes provide 24-hour skilled nursing and medical care under federal staffing rules at 42 CFR 483.35. Medicare covers short-term skilled nursing stays but not assisted living, and Medicaid covers long-term nursing home care in most states while covering assisted living only partially through waivers.
What does assisted living provide?
Assisted living provides help with activities of daily living (bathing, dressing, toileting, mobility, eating), medication management, meals, housekeeping, laundry, transportation, and social activities. It doesn't provide skilled nursing, IV therapy, or ventilator care, though some states license an enhanced tier for residents with moderate medical needs.
How do I start a group home for intellectually disabled adults?
Form your business entity, confirm zoning on your property, write your policy and staffing manuals, apply for your state IDD group home license (which includes a facility inspection and background checks), then enroll separately as a Medicaid HCBS waiver provider. Budget 6 to 12 months total and line up referral sources before your license is issued.
What is the difference between assisted living and a nursing home?
Assisted living offers non-medical personal care support; a nursing home provides skilled medical and nursing care around the clock, required by federal rule to have licensed nursing coverage 24 hours a day. Assisted living has no equivalent federal staffing mandate, and payment sources differ sharply, with Medicare covering nursing home stays short-term but not assisted living at all.
Does Medicare cover assisted living facilities?
No. Medicare does not cover assisted living, group home residential care, or any custodial long-term care, per Medicare.gov's coverage rules. Medicare can still pay for a resident's doctor visits, home health, hospice, or short-term skilled nursing stays regardless of where they live, but it never pays for room, board, or personal care staffing in these settings.
Does Medicaid pay for group homes for intellectually disabled adults?
Medicaid usually pays for the services and staffing in an IDD group home through a Home and Community Based Services (HCBS) waiver authorized under Section 1915(c) of the Social Security Act, not through regular Medicaid. Room and board is typically paid separately by the resident, often from their SSI benefit, capped by state rule.
How much does it cost to start a group home for intellectually disabled adults?
Costs vary heavily by state and property condition, but expect a state license fee (often several hundred to a few thousand dollars), renovation costs to meet fire and life safety code, insurance, staff training and background check costs, and 60 to 90 days of operating cash reserve. Confirm exact license fees with your state licensing agency before budgeting.
What's the capacity limit for a group home?
Most states cap group home licenses at 8 or fewer residents so the home functions and looks like a single-family house rather than an institution. Some states set the IDD-specific cap lower, at 6 or even 4 residents. Confirm the exact cap for your license type with your state's developmental disabilities or human services licensing agency.
How long does it take to get an HCBS waiver slot for a new resident?
It depends entirely on your state's waiting list, and it can take years, not months, in some states, since national HCBS waiting lists run into the hundreds of thousands of people according to CMS-related data. Building referral relationships with your state's case management system or regional center before your home opens helps close this gap faster.
What staff training does an IDD group home need?
Staff typically need CPR/First Aid certification, medication administration certification, abuse/neglect mandatory reporter training, and behavior support training (often Positive Behavior Support specifically), plus person-centered planning training required by many state IDD agencies. Inspectors commonly want to see completed training records on file before they'll issue a license, not a training schedule.
Sources
- CMS, Home and Community-Based Settings Rule (Federal Register / CMS guidance): HCBS settings must be integrated in and support full access to the community, with resident choice over roommates, schedule, and privacy
- eCFR, 42 CFR 483.35 Nursing Services: Nursing homes must have licensed nursing coverage 24 hours a day and an RN on duty at least 8 consecutive hours daily
- Medicare.gov, What Medicare covers: Medicare does not cover long-term custodial care such as assisted living or group home residential care
- Medicaid.gov, Home & Community Based Services: HCBS waivers under Section 1915(c) let states fund long-term services in home and community settings instead of institutions
- Medicaid.gov, State Medicaid provider screening and enrollment requirements: Medicaid HCBS providers are subject to background check and screening requirements as part of program integrity rules
- KFF, Medicaid Home and Community-Based Services waiting lists data: Hundreds of thousands of people are on state HCBS waiting lists for services including IDD waivers, with multi-year waits in some states