In early 2003 San Mateo County, California launched the Children's Health Initiative (CHI), to ensure that all children have access to comprehensive health insurance coverage. This third annual CHI evaluation report describes the demographic and health status characteristics of children enrolled in three public health insurance programs served by the CHI; how service use has changed over time; characteristics of high cost users of services and how they differ from other children; access to dental services and mental health services; the role of schools in outreach and enrollment; and the factors influencing employer decisions to offer insurance for dependents.