Last updated 2026-07-23
TL;DR
Assisted living is licensed housing for older adults or people with disabilities who need help with daily tasks like bathing, medication, and meals, but not full-time skilled nursing. It differs from a nursing home in staffing and medical intensity, and from a group home mainly in scale. Medicare doesn't pay for room and board; Medicaid may cover some services through state waivers.
What is assisted living?
Assisted living is a licensed type of housing built for people, mostly older adults, who need help with everyday tasks but don't need the round-the-clock medical care of a nursing home. Think bathing, dressing, medication reminders, meals, and someone checking on you regularly. Residents usually live in their own apartment or private room and keep a good amount of independence. Every state licenses assisted living under its own name and its own rules. You'll see terms like "residential care facility," "personal care home," or "assisted living residence" depending on where you are, and the licensing agency is almost always a state health department or department of aging, not the federal government. That's why two states can have very different staffing ratios, admission rules, and inspection schedules for what is functionally the same kind of building. According to the CDC's National Study of Long-Term Care Providers, the most recent full federal count found roughly 811,500 residents living in about 28,900 to 30,200 residential care communities nationwide in 2016 [1]. Nobody re-runs that count every year, so any current national total you see is an estimate built on that older baseline, not a fresh census. If you want the fuller breakdown of what a licensed assisted living facility has to provide under state rules, that's covered in the next section. This article walks through what assisted living is, how it differs from a nursing home or a group home, what it costs, and what it takes to open one.
What is an assisted living facility?
An assisted living facility is the physical building and the licensed program inside it: the apartments or rooms, the dining and common areas, the staff, and the specific services the state requires the license to cover. It's the regulated, legal version of "assisted living" as a general idea. Most states set minimum requirements around: staff awake and on-site 24 hours a day, an emergency call system in each unit, medication assistance (different in most states from medication administration, which is often restricted to licensed nurses), at least three meals a day, housekeeping, and a written individual care plan reviewed on a set schedule, commonly every 90 days to a year. Size varies enormously. A licensed assisted living facility can be a converted single-family home with six beds or a 150-unit building with a dedicated memory care wing. Many states split licensing into tiers by size or acuity, so a facility offering more nursing-adjacent care usually carries a higher license category and more inspection scrutiny than a basic personal care home. Some operators describe the larger, purpose-built version as a "facility assisted living" setup to distinguish it from a home-based group home model, though states don't always use that exact wording in statute. If you're comparing options as a family or scoping the market as an operator, the assisted living facility and assisted living facilities pages break license tiers down state by state.
What is a group home, and how is it different from assisted living?
A group home is a smaller, more residential version of licensed care, usually built inside an actual house rather than a purpose-built facility. The term gets used across several populations: people with intellectual or developmental disabilities, people in mental health or substance use recovery, and increasingly seniors who want a home-like small setting instead of a large building. Some states call the senior version an "adult family home" or use adult foster care licensing rules instead of a separate group home category. The main difference from a larger assisted living facility isn't the care level so much as scale and setting. A group home might have 4 to 10 residents, one or two staff on a shift, and a family-style dining table instead of a commercial kitchen and dining room. Licensing usually falls under the same state agency that licenses assisted living, but the specific rule set (staffing ratios, square footage per resident, fire code classification) is often written separately for small residential settings. For seniors specifically, a small group home overlaps a lot with what people search for as assisted living at home: care delivered in a house-like setting rather than an institutional building. Zoning matters here too. Because these are residential structures serving people with disabilities, the Fair Housing Act generally bars local zoning codes from treating a group home differently than any other single-family residence just because of who lives there.
What does assisted living provide day to day?
Assisted living covers help with what clinicians call "activities of daily living," plus meals, housekeeping, social activity, and basic health monitoring. It generally does not include hands-on skilled nursing, IV therapy, or hospital-level monitoring. A typical service package includes: - Help with bathing, dressing, grooming, and toileting
- Medication reminders or assistance (administration rules vary by state)
- Three meals a day plus snacks
- Housekeeping and laundry
- Scheduled transportation to appointments or errands
- Social and recreational programming
- 24-hour staff availability and an emergency call system
- A written, individualized service plan updated on a regular cycle What's usually not included: physical therapy, wound care beyond basic first aid, IV medications, or a nurse on-site around the clock. Once a resident's needs cross into that territory, most states require either a higher license tier (sometimes called "enhanced" or "limited nursing" assisted living) or a move to a nursing home. Families searching "senior assisted living facilities near me" are usually trying to match a loved one's care needs to the right license tier, more than find any building with an open bed. The Eldercare Locator, a public service run by the federal Administration for Community Living, is a reasonable starting point for finding licensed options in a specific area.
What's the difference between assisted living and a nursing home?
| Regulator | State licensing agency | State agency plus CMS federal certification | |
|---|---|---|---|
| Staffing rule | Set by state, often no fixed nurse-hours-per-resident minimum | Federal requirement for sufficient staff to meet care plans; many states add hourly minimums | |
| Medical care level | Help with daily tasks, medication assistance | Skilled nursing, rehab, wound care, IV therapy | |
| Typical setting | Apartment or private room, home-like | Semi-private or private room, more clinical | |
| Medicare coverage | Not covered for room and board | Covered for limited post-hospital stays under specific conditions | |
| Medicaid coverage | Sometimes, via HCBS waiver, rarely room and board | Mandatory Medicaid benefit in every state | Nursing homes also get a federally mandated survey at least every 15 months under the Part 483 framework [2]. Assisted living inspection frequency is set state by state, commonly somewhere between every 6 months and every 2 years depending on license type and compliance history, so confirm the exact cycle with your state licensing agency. |
The core difference is medical intensity and federal oversight. A nursing home (also called a skilled nursing facility) provides 24-hour skilled nursing care, is certified to bill Medicare and Medicaid, and operates under detailed federal requirements found in 42 CFR Part 483 [2]. Assisted living has no equivalent federal rulebook; it's licensed and regulated entirely at the state level. | Feature | Assisted living | Nursing home |
Does Medicare cover assisted living facilities?
No. Medicare does not pay for the room and board or personal care costs of assisted living. Medicare.gov states plainly that long-term custodial care, including help with daily activities in a residential setting, is not a covered benefit [3]. Medicare will still pay for medical services a resident receives while living in assisted living, like doctor visits or physical therapy ordered by a physician, but it won't pay the facility's monthly rate. This confuses a lot of families because Medicare does cover a short skilled nursing facility stay after a qualifying hospitalization, and people assume assisted living works the same way. It doesn't. If a building isn't Medicare-certified as a skilled nursing facility, Medicare simply isn't part of the payment conversation for the custodial portion of the stay.
Does Medicaid cover assisted living?
Sometimes, and usually only for services, not room and board. Medicaid is not federally required to cover assisted living the way it's required to cover nursing home care. Instead, many states use a Home and Community-Based Services (HCBS) waiver, authorized under Section 1915(c) of the Social Security Act, to pay for personal care, case management, and some health-related services delivered inside an assisted living setting [4]. The resident still generally covers room and board out of pocket, through personal funds, long-term care insurance, or in some states an SSI-related supplemental payment. Medicaid.gov describes HCBS waivers as letting states "furnish an array of home and community-based services" so beneficiaries can live in the community rather than an institution [4]. That framing matters because the waiver funds the service package, not the building itself. Not every assisted living facility accepts waiver residents, capacity is often limited with waitlists, and eligibility combines both a functional-need test and an income and asset test stricter than regular Medicaid rules. If your business model depends on Medicaid waiver residents, learn your state's specific waiver name, per-diem or fee-for-service rate, and waitlist reality before you commit to a location or payer mix. That belongs in the planning stage, not something to sort out after opening.
How much does assisted living cost?
Nationally, the median assisted living cost was $4,500 a month, according to Genworth's 2021 Cost of Care Survey, the most recent edition of that widely cited annual study [5]. That figure sits below nursing home costs and above typical home health aide costs for a standard schedule. Costs vary heavily by state, city, and care level. A rural facility in a lower cost-of-living state can run well under the national median, while a facility in a major coastal metro can run two to three times higher. Memory care, higher acuity levels, and private versus shared rooms all push the price up. Because Genworth hasn't repeated this survey at the same scale since 2021, treat these numbers as a reference point adjusted for a few years of cost growth, not a current-year quote for any specific market.
How do I start a group home or assisted living facility?
Starting a group home or assisted living facility is a licensing project as much as a business project. The exact steps and requirements come from your state licensing agency, but the shape of the process looks similar almost everywhere. 1. Pick your population and license type. Senior assisted living, adult foster care, IDD group homes, and mental health residential settings usually have separate licensing categories, and the rules genuinely differ. Decide who you're serving before anything else. 2. Check zoning before you sign a lease or buy property. Many small group homes qualify as a permitted residential use under fair housing protections, but local occupancy limits, fire code, and parking rules still apply, and local enforcement habits vary. Confirm this with your planning department, more than the state licensing office. 3. Write your policy and procedure manual. States generally require written policies covering admission and discharge criteria, medication management, staff training, emergency preparedness, resident rights, and abuse reporting before they'll issue a license. This document usually gets reviewed line by line during application review. 4. Build your staffing plan. You'll need a staff-to-resident ratio that meets your state's minimum, a training plan (many states require set initial training hours plus annual continuing education), and background-check compliance for every employee. 5. Pass a pre-licensure inspection. Most states send an inspector to check life safety code, fire suppression, room sizes, bathroom counts, and kitchen sanitation before issuing a license. Budget real time for corrections; almost nobody passes with zero findings on the first walk-through. 6. Submit the license application with your fee. Fees, timelines, and required attachments (floor plans, sample contracts, insurance certificates, ownership disclosure) vary by state, so confirm the current fee schedule and processing time with your state licensing agency before setting a budget or opening date. 7. Get your business structure and insurance in order. General liability, professional liability, and workers' compensation coverage are typically required before a license gets issued, not add-ons for later. A basic written business plan, the kind SBA guidance recommends for any small business, is worth having even if no lender is involved yet. None of this has a guaranteed timeline. Some states turn around a completed application in a couple of months; others take considerably longer, especially if your building needs corrections after the first inspection. Build slack into your opening date rather than betting a lease start on a best-case licensing timeline. If you'd rather not draft every policy and staffing document from a blank page, GroupHomePath's $299 State Group Home Licensing Kit gives you state-specific starting templates (licensing kit builder) so writing the application isn't the bottleneck. It doesn't replace the inspection or the state's own review, nothing does that, but it saves you from drafting a medication management policy from scratch at midnight.
What licensing, staffing, and inspection rules should I plan for?
Plan on three ongoing compliance buckets once you're licensed: staffing, training, and inspections. None of these are one-time boxes to check at opening; they're recurring obligations for as long as you hold the license. Staffing ratios are set state by state and often scale with resident acuity, more than headcount. A facility with higher-need residents (more mobility assistance, more residents with dementia) usually needs a richer ratio than one with mostly independent residents, even at the same bed count. There's no federal minimum staffing ratio for assisted living the way there is for nursing homes [2], so don't assume a number from one state applies in another; the National Center for Assisted Living's state regulatory review documents just how much this varies. Training requirements typically set a minimum number of hours before a new hire can work unsupervised, plus annual continuing education, often covering dementia care, abuse and neglect reporting, medication assistance, and emergency procedures. Some states also require a separate administrator license or certification, with its own exam and continuing education requirement, apart from general staff training. Inspections happen on a schedule your state sets, generally somewhere between every 6 months and every 2 years for routine surveys, plus unannounced visits triggered by complaints. Walk your own building regularly between official inspections using your state's checklist. It catches most of what an inspector would flag, before it turns into a citation on the public record.
Where can I legally site a group home? (zoning basics)
Zoning for group homes sits at the intersection of local land use law and federal fair housing protection. The Fair Housing Act (42 U.S.C. § 3604) makes it illegal for a local government to treat a home occupied by people with disabilities differently than any other single-family home solely because of the residents' disability status. HUD's guidance describes this as barring municipalities from using zoning to exclude group homes for people with disabilities from residential neighborhoods in ways that wouldn't apply to an unrelated group of housemates. That protection is strong but not unlimited. Local governments can still apply neutral rules that apply to every household: occupancy limits based on square footage, fire and building code, parking requirements, and in some states a minimum separation distance between licensed facilities. Before you commit to a property: pull the zoning designation, call the planning department and ask directly whether a group home of your intended size is a permitted use or requires a conditional use permit, and check whether your state has a facility separation requirement that could rule out an otherwise good house. Get any answer in writing when you can. A verbal "that should be fine" from a planning clerk isn't a permit, and it won't hold up if a neighbor complains after you've already signed a lease.
Frequently asked questions
What is assisted living?
Assisted living is licensed housing, usually for older adults, that provides help with daily tasks like bathing, dressing, medication reminders, and meals, without the round-the-clock skilled nursing of a nursing home. Residents typically live in their own apartment or private room and keep significant independence. States, not the federal government, set the licensing rules and inspection schedule.
What is a group home?
A group home is a smaller, house-based version of licensed residential care, commonly 4 to 10 residents, serving seniors, people with intellectual or developmental disabilities, or people in mental health or recovery care. It's licensed by the same type of state agency as larger assisted living facilities, but under rules written specifically for small residential settings.
What is an assisted living facility?
An assisted living facility is the licensed building and program combined: the apartments or rooms, staff, and required services like 24-hour staffing, meal service, medication assistance, and a written care plan for each resident. Requirements and license tiers vary by state, so the exact definition of "assisted living facility" differs depending on where the building is located.
What's the difference between assisted living and a nursing home?
Assisted living helps with daily tasks and is licensed only at the state level. A nursing home provides 24-hour skilled nursing care, is Medicare/Medicaid certified, and follows federal requirements under 42 CFR Part 483, including mandatory surveys at least every 15 months. Nursing homes handle higher medical acuity; assisted living generally does not.
What does assisted living provide?
Assisted living typically provides help with bathing, dressing, grooming, and toileting, medication reminders, three daily meals, housekeeping, transportation, social activities, 24-hour staff availability, and an individualized care plan. It does not usually provide skilled nursing, IV therapy, or hospital-level medical monitoring; those needs generally require a nursing home.
Does Medicare cover assisted living facilities?
No. Medicare does not pay for the room, board, or custodial care costs of assisted living, per Medicare.gov guidance on long-term care coverage. Medicare will pay for covered medical services a resident receives while living there, like doctor visits or ordered therapy, but not the facility's monthly rate for housing and personal care.
Does Medicaid cover assisted living?
Sometimes, through state Home and Community-Based Services (HCBS) waivers under Section 1915(c) of the Social Security Act, which can pay for personal care and case management delivered in assisted living. Medicaid generally does not cover room and board there, and waiver capacity is often limited with waitlists, unlike nursing home Medicaid coverage, which is a mandatory benefit.
How do I start a group home?
Pick your population and license category, confirm zoning with your local planning department, write required policies (admission, medication management, emergency procedures), build a staffing and training plan that meets your state's ratios, pass a pre-licensure inspection, and submit your application with the required fee and attachments. Every step routes through your state licensing agency.
How to start a group home for seniors specifically?
The process mirrors general group home licensing but under your state's senior-specific category, often called adult foster care, personal care home, or assisted living residence licensing. You'll still need a policy manual, staffing plan matched to resident acuity, a compliant building, and a state inspection before your license is issued.
How much does it cost to start an assisted living facility or group home?
There's no single national number, and this site avoids invented figures. Startup costs depend heavily on whether you're buying or leasing a property, renovation needed to meet fire code and bathroom counts, licensing fees, insurance, and staffing before opening. Get a written fee schedule from your state licensing agency and a contractor bid before budgeting.
How long does it take to get an assisted living or group home license?
Timelines vary by state and by how ready your building is at first inspection. Some states process a complete application in a couple of months; others take longer, especially if corrections are needed after the initial walk-through. Confirm current processing times directly with your state licensing agency rather than assuming a fixed timeline.
Can I run a group home for seniors out of my own house?
In many states, yes, if the house meets occupancy, fire code, and bathroom requirements and you obtain the correct residential care or adult foster care license for the number of residents you plan to serve. Local zoning still applies, though the Fair Housing Act generally protects licensed group homes from being treated differently than any other single-family residence.
What's the difference between assisted living and memory care?
Memory care is a specialized license type or unit within assisted living designed for residents with Alzheimer's or other dementias, usually with a secured environment, higher staff-to-resident ratios, and dementia-specific staff training. Regular assisted living can serve residents with mild cognitive changes but typically isn't secured or staffed at the same level.
What staffing ratio does assisted living need?
There's no federal staffing ratio for assisted living. Each state sets its own minimum, often scaled to resident acuity rather than a flat number, and requirements differ for day shift versus overnight coverage. Check your specific state licensing agency's regulations for the exact ratio and any required awake-overnight-staff rule.
Sources
- Medicaid.gov, Home & Community Based Services: States use 1915(c) HCBS waivers to pay for personal care and case management in assisted living settings, not room and board
- Medicare.gov, Long-Term Care coverage page: Medicare does not cover long-term custodial care or assisted living room and board
- CDC/NCHS, National Study of Long-Term Care Providers: About 811,500 residents lived in roughly 28,900 to 30,200 residential care communities nationwide in 2016
- Genworth, Cost of Care Survey 2021: Median monthly assisted living cost was $4,500 in 2021, versus $7,908 to $9,034 for nursing home care
- eCFR, Title 42 Part 483 (Medicare/Medicaid nursing home requirements): Nursing homes follow federal requirements including mandatory surveys at least every 15 months