Much of the quantitative literature evaluating welfare reform focuses on caseloads. In order to contextualize caseload declines, the current study examines a closely related measure of welfare coverage: the ratio of children receiving welfare assistance to children in poverty. A multilevel model approach is employed to investigate state-level factors that have contributed to declines in coverage. The findings suggest that welfare coverage has fallen the most in states with higher levels of coverage prereform, ideologically conservative governments, Republican governors, and larger proportions of African American welfare recipients. In addition, this study identifies specific policies and administrative practices that are associated with falling coverage and reveals a substantial erosion of the traditionally countercyclical relationship between unemployment and welfare provision since reform. By the late 2000s, the policy choices that embody welfare reform have produced both historically low levels of welfare coverage nationally and unprecedented diversity in benefit accessibility across states.