This study documents gaps in the way in which Medicaid meets its responsibilities to provide access to health care for children and offers recommendations on what should be done about the gaps. Major findings of the study are presented in a section on problems of eligibility, benefits, and reimbursement. Findings indicate that due to the inadequacies of Medicaid eligibility, almost half of all poor children do not have Medicaid and are in danger of falling through the Medicaid safety net. Many eligible children do not receive benefits to which they are entitled because the application process is too difficult to complete. Providers, such as children's hospitals, have incurred large financial losses and face difficulties in providing access to all children and in meeting their health care needs. It is concluded that the Medicaid safety net is in need of major repair. Recommendations propose the reform of Medicaid eligibility, enrollment, benefits, and reimbursement for children so that equal access to care for all children will be insured. It is expected that the reforms will be phased into the Medicaid program, thus complementing reforms which are needed to enhance the effectiveness of private insurance as the mainstream financing source. (RH)