This study analyzes children's health insurance trends in the US and California from 2000 to 2004, finding that employer-based health coverage has eroded significantly over the past five years. If premiums continue to rise at current rates, 55% of the nation's children and fewer than half of California's children will be insured through a parent's employer by 2010. This trend is likely to continue, and without immediate action, 1.7 million more U.S. children will be uninsured (280,000 more in California) and 2.7 million more children will be enrolled in a public program (470,000 more in California) than in 2004. This shift of healthcare costs from employers to individuals reflects a crisis for working families.