The Iowa 65+ Rural Health Study gathered health status information on all elderly persons living in two rural Iowa counties. In this report these data are used to determine the ratio of persons with activities of daily living (ADL) dependencies living in the community to those in institutions. Results indicated that the "community/institutional dependency ratio" is about 1 to 1 for these counties, which is about half the ratio representing conventional wisdom. Possible explanations for this difference are discussed. In addition, it was found that the level of ADL dependency (need) can serve alone as an almost certain predictor of institutionalization for some elderly. For others, ADL dependency (need) is only one factor. The likely variability of the community/institutional dependency ratio across different geographic areas has implications for government funding of home health care, for long-term care insurance, and for eliminating excess demand. These implications are discussed.