The past decade has seen a rapid growth in residential alternatives for providing care for the elderly and disabled. Confusion exists regarding the names and roles of each of these alternatives, and public policy regulating the care provided within each lacks a clear focus. In particular, federal and state reliance on past experience in regulating the nursing home industry has defined the regulatory attempts currently impacting residential care. This article addresses the consequences of relying on these patterns of the past, and identifies future directions in residential care.