Despite the disturbing fact that approximately 9 million children in the United States lack insurance, without public programs such as Medicaid and the State Children's Health Insurance Program (SCHIP), many millions more would be uninsured. Since 1965, Medicaid has provided states with funding and a framework to provide a comprehensive set of health services to needy children and adults. Through state policy decisions, each state has created a unique configuration of services and populations.

This article reviews the entire spectrum of coverage for children in the United States: private and public health insurance, and no health insurance. It places particular emphasis on the main features of Medicaid and SCHIP. The ways that these programs have influenced and benefited each other are also considered, as well as their comparative strengths and weaknesses. In addition, the article discusses innovations that have emerged as states have experimented with different ways to provide health coverage to children. It concludes by considering the implications of increasing fiscal pressures on programs, and the progress that states have made in covering children.

The State Children's Health Insurance Program (SCHIP) is the product of a series of policy and political compromises and generates numerous structural and policy issues for states. CHIP entitles states to federal financial aid to provide health assistance to targeted children, through Medicaid expansions, new program implementation, or a product of the two. States that elect to operate CHIP programs apart from Medicaid have enormous discretion under the law to determine how they will structure their programs, the services they will cover, the form that benefits will take, and the conditions of participation and consumer protections that will apply. Determining what approach to take, as well as how to respond to the choices posed by the statute, represents a major test of how states address the needs of children and families.