The State Children's Health Insurance Program (CHIP) 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.