Congress passed the State Children’s Health Insurance Program (SCHIP) as part of the Balanced Budget Act of 1997. The goal was to provide health coverage for uninsured children from modest-income families that earned too much to qualify for Medicaid. However, two things have recently become clear: (1) SCHIP has expanded far beyond its intended goal, even covering hundreds of thousands of adults, and (2) it is encouraging millions of those with private insurance to drop it for the government-subsidized coverage. SCHIP is now up for reauthorization, and many members of Congress are pushing for an even greater expansion of the program. We think there is a better way. By focusing on truly needy children and encouraging families to keep their existing coverage, SCHIP can expand coverage and provide more cost-effective health insurance.