The purpose of this study was to analyze characteristics related to the activity of Daily Living (ADL) and dementia among the elderly people who have Medicaid. The cross-sectional descriptive survey study was a nationwide randomization sampling among the population of elderly families who have Medicaid. The data were collected during the month of October, 1999 and total sample was 1,027 elderly people. There were major findings according to the studies. In the results of the ADL assessment most of elderly people were within the 24 to 45 point range. Also, 63.3% of elderly people who made 45 points do not need help when performing daily activities according to the 15 areas of activity components, and 4.9% of these people couldn't do their daily activities. The results of the Dementia assessment were 70.6% of elderly people were in the normal range, 21.7% have a mild case, and 2.8% have severe case of dementia. These were found by using instruments for mental states, which simplified to items of detection of early dementia. In the result of these tests, there was a significantly positive correlation between ADL and degree of dementia with the pearson correlation coefficients. As a result of these studies, the author recommend to strengthen function and organization of public health like a visiting nurse center for elderly people who are over 65 years old. In addition, the government should apply early detection and management system for dementia in the community continuously and cost-effectively, especially for elderly people who live alone and are vulnerable elderly as our priority.