State payments to group homes run mostly through Medicaid, and per-resident amounts vary widely depending on who lives in the home and how much care they need. For people with intellectual and developmental disabilities, the population that fills most group home beds, average Medicaid spending on home and community-based services was roughly $47,300 per person per year as of fiscal year 2021, or about $130 per day in service reimbursement alone. For seniors and adults with physical disabilities in similar settings, annual costs commonly land between $15,000 and $25,000. Those figures cover services only. Room and board is billed separately and paid by the resident, usually from their Supplemental Security Income. How much do states pay group homes per resident? The honest answer is a range, and the range is driven by acuity tiers, staffing requirements, and where the home is located.
What the Payment Actually Covers
Before any dollar figure makes sense, one distinction has to be clear: Medicaid’s Home and Community-Based Services (HCBS) waivers pay for care, not housing. The federal statute authorizing these waivers explicitly covers “home or community-based services (other than room and board),” and the implementing regulation at 42 CFR 441.310 blocks federal matching funds from being used for room and board.1Office of the Law Revision Counsel. 42 U.S. Code 1396n – Compliance With State Plan and Payment Provisions2eCFR. 42 CFR 441.310 – Limits on Federal Financial Participation (FFP)
What Medicaid pays for through HCBS waivers includes residential habilitation (teaching daily living skills), personal care assistance, behavioral support, day programs, transportation, and skilled nursing when needed. Each state’s waiver defines its own menu of covered services. The care and supervision are covered; the rent, food, and utilities are not.
HCBS is the dominant funding channel for group home care. In calendar year 2021, Medicaid programs spent approximately $82.5 billion on HCBS nationally, compared to about $66.6 billion on institutional care.3MACPAC. Spending and Utilization for Medicaid Home and Community-Based Services Nearly every state and the District of Columbia operates at least one 1915(c) waiver, collectively serving about 1.7 million Medicaid enrollees.4Centers for Medicare & Medicaid Services. Section 1915(c) Waiver Program Participants in 2020
Per-Resident Amounts by Population
Pinning down a single national number is difficult, because every state sets its own rates and those rates vary by population served, level of care, and geography. The available data still gives useful reference points.
Intellectual and Developmental Disabilities
For adults with intellectual and developmental disabilities (IDD), which accounts for the largest share of group home placements, average annual Medicaid HCBS spending was approximately $47,300 per person as of fiscal year 2021. That works out to roughly $130 per day per resident in service reimbursements, before room and board.
Averages hide a lot. People with intensive medical or behavioral needs can cost several times the average. Those needing lighter supervision cost far less.
Seniors and Adults With Physical Disabilities
Per-person costs for older adults and people with physical disabilities in group home settings tend to run lower because the care is often less intensive. Annual HCBS costs for these populations are commonly in the range of $15,000 to $25,000, reflecting the difference in staffing and supervision requirements.
How Acuity Tiers Split the Range
Most states use tiered reimbursement systems. Each resident is assessed and assigned a level based on medical complexity, behavioral support needs, and how much help they require with daily activities like bathing, eating, and managing medications. A resident at a lower tier might generate a daily service rate under $100. Someone with significant behavioral challenges or medical needs could generate $250 or more per day. Those tiers are the primary mechanism states use to match payment to actual care demands, and they’re the reason two group homes down the road from each other can be paid dramatically different amounts per bed.
What Drives a Specific Home’s Rate Up or Down
Acuity and Staffing Ratios
The single biggest cost driver is how many staff hours each resident requires. A home serving four residents who each need one-on-one support for significant portions of the day costs far more to operate than a home serving six residents who share staff attention. States set minimum staffing ratios, and the reimbursement rate reflects those requirements. When a home employs licensed professionals like registered nurses or behavioral specialists, the rate climbs further. IDD group homes serving residents with dual diagnoses or severe behavioral challenges often receive the highest per-day reimbursements for that reason.
Geographic Cost Differences
Labor costs, property values, and general cost of living vary between urban and rural areas and across regions of a state. Many states build geographic adjustments into their rate structures, so a group home operating in a high-cost metropolitan area receives more per resident than an identical home in a rural county. Without those adjustments, providers in expensive areas would struggle to recruit staff.
Inflation Adjustments
States periodically adjust reimbursement rates to keep pace with rising costs, though the timing and generosity of those adjustments vary. Some states apply annual cost-of-living increases using an inflation factor. Others hold rates flat for years at a stretch, which creates real financial pressure on providers during periods of high wage inflation. When a state raises the minimum wage, some legislatures specifically adjust group home rates to account for the added labor cost. Others don’t.
Who Pays for Room and Board
Because Medicaid HCBS won’t touch housing costs, someone else has to. In most cases that’s the resident, typically using their Supplemental Security Income benefit. For 2026, the maximum federal SSI payment is $994 per month for an eligible individual.5Social Security Administration. SSI Federal Payment Amounts for 2026
Many states add a supplemental payment on top of the federal SSI amount for residents of licensed residential facilities, which can push total monthly income for room and board well above $1,000. That combined payment goes to the group home operator to cover housing, food, and utilities. Medicaid separately reimburses the operator for the care services provided. Two revenue streams, two purposes, one resident.
Why State Budgets See the Cost Differently Than Providers Do
Providers see a single per-diem rate. State budgets see something more layered, because the federal government picks up a large share of Medicaid costs through the Federal Medical Assistance Percentage (FMAP). The federal share varies by state based on per-capita income. Wealthier states like California, New York, and Connecticut receive the statutory minimum of 50%, meaning the state covers the other half. Lower-income states receive considerably more. For fiscal year 2027 (beginning October 2026), Mississippi’s FMAP is 77.32%, so the federal government covers more than three-quarters of Medicaid costs there.6Federal Register. Federal Financial Participation in State Assistance Expenditures; Federal Matching Shares for Medicaid
The FMAP doesn’t change what a group home receives per resident. The provider gets the full Medicaid rate either way. What it changes is how that dollar is split between state and federal contributions, and that split explains why states with similar rate schedules can have very different budget impacts from the same group home population.
Beyond Medicaid, states fund group homes through general appropriations and, in some cases, specific grant programs for building or renovating residential facilities. Federal capital funding is also available for supportive housing through HUD’s Section 811 program, which provides capital advances for housing serving people with disabilities and requires each project to include a supportive services plan reviewed by the appropriate state or local agency.7U.S. Department of Housing and Urban Development (HUD). Descriptions of Multifamily Programs Those channels matter for building the home. Medicaid HCBS pays to keep it running.
What to Ask Your State to Get the Real Number
National averages point you at the neighborhood. They don’t tell you what a particular home in a particular state will actually be paid for a particular resident. To get to that number, you have to look at three things specific to the state:
- The waiver’s rate schedule for the service categories the home provides (residential habilitation, personal care, behavioral support, and any add-on services).
- The assessment tool the state uses to place residents into acuity tiers, and the per-diem rate attached to each tier.
- Any geographic adjustment factor for the home’s location, plus the state’s current SSI supplement for residents in licensed facilities.
Those three pieces, applied to the specific residents in the home, produce the actual monthly payment. Average figures are useful for scaling expectations. The tier assignments and the state’s rate tables are what determine the check.