Last updated 2026-07-23
TL;DR
Assisted living is licensed, non-medical residential care that helps people with daily activities like bathing and medication reminders, without the skilled nursing found in a nursing home. Medicare does not pay for the room-and-board cost. Colorado, Montana, Wyoming, Utah, and Idaho each license these homes separately, so anyone starting a group home in the Rockies has to confirm rules state by state.
What is assisted living?
Assisted living is a licensed residential care option for people, usually older adults, who need help with daily activities but don't need round-the-clock skilled nursing. Think meals, medication reminders, bathing and dressing help, housekeeping, and staff on site 24 hours a day. It sits between fully independent living and a nursing home. It's a home, not a hospital. Every state defines and regulates assisted living a little differently, which is exactly why the term gets confusing fast. Some states call the license category "assisted living residence," others use "personal care home" or "residential care facility." The label changes state to state; the underlying service model, custodial support inside a home-like setting, usually doesn't. If you're comparing options for a family member or scoping out the industry as an operator, start with the general overview at assisted living before you get into any single state's rulebook. The regulatory details change by state, but the basic service model doesn't.
What is an assisted living facility, exactly?
An assisted living facility is the physical building and the licensed business operating inside it, holding a state license to provide housing plus personal care services to residents who can't fully live alone. It's not a hotel with a nurse on call, and it's not a nursing home. It occupies its own regulatory category, usually inspected by the same state agency that licenses nursing homes but under a separate set of rules. That distinction trips up new operators more than almost anything else on the application: one agency, two very different rulebooks. Most states license facilities by size and level of care. A small facility might house 6 to 8 residents in what looks like an ordinary house. A large facility might house 100 or more residents in a purpose-built building with multiple wings and levels of care (standard assisted living, memory care, and sometimes a skilled nursing wing under the same roof). For a closer look at how licensing categories break down by size and service level, see assisted living facility and assisted living facilities. Both terms get used interchangeably in casual conversation, but your state's statute will use one specific phrase, and that's the phrase that matters on your application.
What is a group home, and how is it different from assisted living?
A group home is a licensed residential setting, usually in an ordinary house, where a small number of unrelated people live together and receive support services. It's a broader category than assisted living. Group homes serve seniors, but also people with intellectual and developmental disabilities, people in mental health recovery, and people in substance use recovery. Assisted living is really one type of group home, sized and licensed for the senior care population. Same address, different resident population, different rulebook. The practical differences usually come down to three things: population served, staffing ratio, and the specific state license category you apply under. A group home for adults with IDD might operate under a developmental disabilities waiver program rather than the health department's assisted living rules. A senior-focused group home in a residential neighborhood might be licensed as a small assisted living residence, sometimes called a residential care home, with 3 to 8 beds. Size matters a lot here. Small group homes tend to blend into a neighborhood, which is part of why federal fair housing law treats them differently from commercial care facilities (more on that in the zoning section below). Larger assisted living buildings, by contrast, usually require commercial zoning and a much bigger capital investment before you ever apply for a license.
What does assisted living provide day to day?
Assisted living provides help with activities of daily living, which is the industry's shorthand for bathing, dressing, toileting, mobility, and eating. On top of that baseline, most licensed facilities provide three meals a day, medication management or reminders, housekeeping and laundry, transportation to appointments, social and recreational activities, and staff available around the clock for emergencies. What assisted living does not typically provide is skilled nursing care. If a resident needs IV therapy, wound care beyond a basic level, or ventilator support, that resident usually needs a nursing home or a specialized medical setting instead. Some states allow limited nursing tasks to be delegated to trained aides under a nurse's supervision, but the scope is narrow and state rules vary on exactly what's allowed. That gap, medical versus custodial, is the whole ballgame for licensing purposes. Families weighing assisted living against home-based care often ask how the two compare on cost and control. If that's your question, assisted living at home walks through what in-home aides can and can't replace compared to a licensed facility.
Assisted living vs nursing home: what's the real difference?
| Care level | Custodial, non-medical | Skilled nursing, medical | |
|---|---|---|---|
| Staffing | Aides, med techs, an administrator | RNs, LPNs, licensed staff around the clock | |
| Federal Medicaid rule | Optional state benefit (waiver-based) | Mandatory Medicaid benefit [1] | |
| Typical setting | Home-like, private or semi-private rooms | Clinical, hospital-adjacent feel | |
| Median monthly cost (national) | $5,350 [2] | $8,669 to $9,733 [2] | That cost gap is one reason families push to keep loved ones in assisted living as long as it's safe to do so, and one reason states keep expanding waiver slots for home and community-based care instead of building more nursing beds. |
The short answer: assisted living is custodial and residential, a nursing home (also called a skilled nursing facility) is medical and clinical. Nursing homes have registered nurses on staff around the clock and are built to handle recovery from surgery, complex medical conditions, and rehabilitation. Assisted living homes are built around daily living support in a more home-like setting. Regulation reflects that gap. Nursing facility services are a mandatory Medicaid benefit for eligible beneficiaries under federal law, meaning every state's Medicaid program has to cover them [1]. Assisted living services are optional. States can choose to cover some assisted living-type services through a Medicaid home and community-based services waiver, but they aren't required to, and none of it covers the room-and-board portion of the bill. | Feature | Assisted living | Nursing home |
Does Medicare cover assisted living facilities?
No. Medicare does not cover the cost of assisted living, including room and board, personal care, or the custodial support that makes up most of what assisted living actually provides. Medicare's own coverage page states plainly that the program "doesn't cover long-term care (also called custodial care) if that's the only care you need" [3]. Medicare will pay for short-term skilled nursing care after a qualifying hospital stay, and it covers medical services a resident might receive while living in assisted living, like doctor visits, physical therapy, or a hospital stay. But it does not pay the facility's monthly rate, and it never covers a stay whose only purpose is help with daily living rather than medical treatment. This surprises a lot of families researching options for the first time. People often confuse Medicare with Medicaid here, and the confusion is understandable since both names sound alike. Medicaid, unlike Medicare, can help pay for some assisted living-type services in many states, but through specific waiver programs rather than a blanket benefit. More on that below.
How is assisted living licensed across Colorado, Montana, Wyoming, Utah, and Idaho?
Each Rocky Mountain state runs its own licensing program, its own inspection schedule, and its own terminology, so there's no single "Rocky Mountain" license. Here's the agency you'd start with in each state, though exact categories, fees, and staffing ratios need to be confirmed with your state licensing agency before you build a budget or a floor plan around them. Colorado licenses assisted living residences through the Colorado Department of Public Health and Environment's Health Facilities and Emergency Medical Services Division. Montana licenses these facilities through the Department of Public Health and Human Services' Licensure Bureau. Wyoming's assisted living and adult day rules fall under the Department of Health's Aging Division and its Office of Healthcare Licensing and Surveys. Utah consolidates health facility licensing, including assisted living, under the Department of Health and Human Services' Office of Licensing. Idaho licenses residential and assisted living facilities through the Department of Health and Welfare's facility standards program. All five states require a pre-license inspection, a background check on operators and staff, a written policy manual covering resident care and emergency procedures, and proof the building meets life safety code for its occupant load. What differs is the paperwork format, the fee schedule, staffing ratio math, and how often renewal inspections happen. None of that is safe to assume from one state to the next, even for neighboring states with similar populations.
How do I start a group home or assisted living business?
Starting a group home follows a fairly predictable sequence, even though the paperwork inside each step varies by state. Here's the order that actually works. 1. Pick your population and license category first. A senior-focused assisted living home, an IDD group home, and a mental health residential program each fall under different rules, sometimes different state agencies entirely. 2. Form your business entity and get your tax ID before you sign a lease or make an offer on property. 3. Confirm zoning on any property before you commit to it. A residential-zoned house can work for a small group home in many states; a larger assisted living building usually needs commercial zoning and fire code upgrades. 4. Write your policy and procedure manual. Licensing agencies expect written protocols for medication management, emergency response, resident rights, staffing, and incident reporting before they'll schedule an inspection. 5. Build your staffing plan, including administrator qualifications, staff-to-resident ratios, and required training hours, all of which vary by state and by facility size. 6. Submit your application, pay the fee, and pass your pre-license inspection. Processing times vary a lot by state and by how complete your application is the first time you submit it. Nobody can promise a fast approval, and any operator who tells you otherwise is guessing. If you'd rather not build every policy document and staffing plan from a blank page for your specific state, GroupHomePath's $299 State Group Home Licensing Kit packages the state-specific application checklist, policy manual templates, and staffing plan worksheets together, which is faster than assembling it all from scratch. You can start building yours at /licensing-kit-builder.
What staffing and training does assisted living require?
Staffing and training rules are one of the widest gaps between states in this whole industry. Some states require an assisted living administrator to hold a specific state-issued certification and pass an exam. Others only require a background check and a set number of documented training hours. The National Center for Assisted Living, the industry's main trade group, publishes state-by-state comparisons precisely because the variation is this large. At minimum, expect your state to require a criminal background check for anyone with resident contact, some form of initial orientation training (topics usually include resident rights, infection control, emergency procedures, and abuse reporting), and CPR or first aid certification for at least some staff on every shift. Larger facilities usually face minimum staff-to-resident ratios that scale with acuity and time of day. Don't guess at these numbers. Training hour requirements, administrator licensing exams, and staffing ratios are exactly the kind of detail that changes between legislative sessions, so confirm the current rule with your state licensing agency before you build a staffing budget around last year's number.
What zoning and property issues come up when opening a group home?
Zoning is where a lot of first-time operators get stuck, mostly because they buy or lease property before checking whether the local zoning code allows a group home use on that lot. Small group homes serving a handful of residents often qualify for protection under the federal Fair Housing Act, which the U.S. Department of Housing and Urban Development enforces against local zoning rules that try to single out group homes for extra restrictions. That protection isn't unlimited, though. It generally applies to homes that function like a single residential household, typically a small number of unrelated residents living together with support staff. Larger assisted living buildings, adult day programs, and facilities with heavier medical services usually fall outside that narrow protection and need to meet standard commercial zoning and building code requirements, including fire sprinkler thresholds that kick in above a certain occupant count. Before signing a lease, get the local zoning classification in writing from the municipal planning department, and separately confirm with your state licensing agency what physical building standards apply to your specific license category. The two approvals (local zoning and state licensing) are separate processes running on separate timelines, and neither one guarantees the other.
What happens during a licensing inspection?
Inspections are where the paperwork meets reality. Every state requires an initial, pre-license inspection before a group home or assisted living facility can open, and then some schedule of ongoing inspections after that, usually annual or biennial, plus complaint-driven inspections that can happen any time. Inspectors typically check life safety compliance (fire extinguishers, exits, alarm systems), sanitation, medication storage and administration records, staff files and training documentation, and resident care plans against what's actually happening on the ground. If inspectors find deficiencies, most states issue a statement of deficiencies and require a plan of correction with a deadline. Minor issues (a missing training certificate, an expired fire extinguisher tag) usually get a short correction window. Serious health and safety violations can trigger a follow-up inspection, a fine, or in extreme cases a suspended or revoked license. The practical move here is to treat your written policy manual as a living document staff actually follow, not paperwork you assembled once for the application. Inspectors compare your policies against your practice, and gaps between the two are the single most common source of citations.
How is assisted living funded, and can Medicaid help?
Assisted living is funded mostly through private pay: residents or their families cover the monthly rate out of pocket, sometimes with help from long-term care insurance. Medicaid can help in many states, but only through specific programs, not as a blanket benefit the way nursing home care works. Private pay remains the most common route by far. The main vehicle is a Medicaid Home and Community-Based Services (HCBS) waiver, sometimes called a 1915(c) waiver. As CMS describes it, "Home and Community-Based Services (HCBS) provide opportunities for Medicaid beneficiaries to receive services in their own home or community rather than institutions or other isolated settings" [4]. States design their own waiver programs, set their own income and asset limits, and typically cap the number of waiver slots available, so waitlists are common. Even where a waiver covers personal care services inside assisted living, it usually still doesn't cover room and board, which residents or Supplemental Security Income have to cover separately. Waitlists are the norm, not the exception, for these waivers. Other funding sources worth knowing about: Supplemental Security Income with a state supplemental payment (varies by state), the VA Aid and Attendance benefit for eligible veterans and surviving spouses needing help with daily activities , and private long-term care insurance policies purchased years before care is needed. None of these come with a sure yes on eligibility, and rules change, so verify current limits with your state Medicaid agency and the VA directly rather than relying on a general estimate. If you're building out the funding and Medicaid section of your own facility's operating plan, that's one of the pieces GroupHomePath's State Group Home Licensing Kit organizes state by state, alongside the licensing checklist itself.
Frequently asked questions
What is assisted living?
Assisted living is licensed residential care for people who need help with daily activities like bathing, dressing, and medication reminders, but don't need the round-the-clock skilled nursing found in a nursing home. It typically includes meals, housekeeping, staff on site 24 hours a day, and social activities, all within a home-like rather than clinical setting.
What is a group home?
A group home is a licensed residential setting, often an ordinary house, where a small number of unrelated people live together with support services. It's a broader category than assisted living and includes homes for seniors, people with intellectual and developmental disabilities, and people in mental health or substance use recovery.
What is an assisted living facility?
An assisted living facility is the licensed building and business providing housing plus personal care services to residents who can't fully live independently. It's regulated separately from nursing homes, usually by the same state health agency but under distinct rules for staffing, building requirements, and level of care.
What's the difference between assisted living and a nursing home?
Assisted living provides custodial, non-medical support like help with bathing and meals in a home-like setting. A nursing home provides skilled, clinical nursing care around the clock for people recovering from surgery or managing complex medical needs. Nursing facility services are a mandatory Medicaid benefit; assisted living coverage is optional and waiver-based.
Does Medicare cover assisted living facilities?
No. Medicare does not pay for assisted living room and board or custodial care. Medicare.gov states the program doesn't cover long-term custodial care if that's the only care a person needs. Medicare will pay for medical services a resident receives while living there, like doctor visits or short-term skilled nursing after a qualifying hospital stay.
How do I start a group home?
Pick your resident population and license category, form your business entity, confirm zoning before committing to a property, write a policy and procedures manual, build a staffing plan meeting your state's ratios and training rules, then submit your license application and pass the pre-license inspection. Every state's exact steps and fees differ, so confirm details with your state licensing agency.
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 emergency response system that in-home care, even with daily visits, usually can't replicate. In-home care keeps someone in their own house longer but relies on family or scheduled aides rather than staff who are always on site.
How much does assisted living cost per month?
The national median cost of assisted living was about $5,350 a month according to the Genworth Cost of Care Survey. Nursing home care runs considerably higher, around $8,669 for a semi-private room and $9,733 for a private room. Actual costs vary widely by state, region, and level of care needed.
Is a group home the same as a nursing home?
No. A group home is a broad category of licensed residential care that can serve seniors, people with disabilities, or people in recovery, and typically provides non-medical support. A nursing home is a specific, medically-focused facility with skilled nursing staff around the clock, regulated separately and funded differently under Medicaid.
Do I need a nursing background to open a group home?
Not necessarily. Most states require an administrator to complete a state-approved training program or hold a specific administrator certification rather than a nursing license, since assisted living and most group homes provide custodial rather than medical care. Requirements vary significantly by state, so confirm the administrator qualifications with your state licensing agency before you apply.
Can Medicaid pay for assisted living in Rocky Mountain states?
In some cases, yes, through a state's Medicaid Home and Community-Based Services waiver, which can cover personal care services inside assisted living. It usually doesn't cover room and board, and slots are typically capped with waitlists. Coverage details differ by state, so check current waiver rules with your state Medicaid agency.
What license do I need to open an assisted living home in Colorado, Montana, Wyoming, Utah, or Idaho?
Each state issues its own assisted living or residential care license through its health licensing agency: Colorado's CDPHE Health Facilities Division, Montana's DPHHS Licensure Bureau, Wyoming's Office of Healthcare Licensing and Surveys, Utah's Office of Licensing, and Idaho's Department of Health and Welfare. Exact category names and requirements differ, so start with your state's agency directly.
How long does it take to get an assisted living license?
There's no fixed timeline, and no agency guarantees a specific processing time. It depends on how complete your application is, whether your building passes its first life safety inspection, and how busy your state's licensing office is. Incomplete applications and failed inspections are the most common causes of delay.
What's the difference between a group home and a personal care home?
The terms overlap heavily and states use them inconsistently. Generally, "personal care home" describes a smaller, non-medical residential setting similar to assisted living, often for seniors, while "group home" is the broader umbrella term covering that population plus IDD, mental health, and recovery residences. Always check what your specific state statute calls the category you're applying under.
Sources
- Medicaid.gov, Home & Community-Based Services: HCBS waivers let Medicaid beneficiaries receive services in the community rather than institutions
- Medicare.gov, Long-Term Care coverage: Medicare doesn't cover custodial long-term care if that's the only care needed
- Genworth Cost of Care Survey: Median monthly costs for assisted living, home health aide, and nursing home care
- Medicaid.gov, Mandatory & Optional Medicaid Benefits: Nursing facility services are a mandatory Medicaid benefit while assisted living is optional
- Colorado Department of Public Health and Environment: How assisted living residences are licensed and regulated in Colorado
- Electronic Code of Federal Regulations (eCFR): Federal requirements distinguishing nursing home (skilled nursing facility) regulation from assisted living
- Medicaid.gov: Medicaid Home and Community-Based Services waivers can help fund assisted living costs