The Children's Health Insurance Program (CHIP) began as a federal stopgap measure to assist families whose incomes were too high to qualify for Medicaid, but too low to make health insurance for their children affordable. In 2002, efforts were launched around the United States to recruit eligible children into the program. This pilot study examined the use of health services by families with children on CHIP and Medicaid. The project focused on how families in Mission, a small city in South Texas near the border with Mexico, used the programs. The study found increasingly efficient use of health services over time, including a statistically significant drop of nearly 80% in the use of the emergency room from the first to the second year of the study. Preventive care was used regularly by most families in the study as measured through rates of visiting the dentist and getting an eye examination; however, those rates fell immediately and drastically after the state legislature cuts in CHIP came into effect in the fall of 2003. Appended to this report are the calculations of rates of children visiting the emergency room, going to the dentist, receiving eye examinations, and visiting doctors for non-emergent care. (Contains 7 tables and 5 figures.) [This report was supported with funds provided by the RGK Foundation to the Children's Defense Fund-Rio Grande Valley for this project.]