The authors find that more than half of all states have implemented formal welfare diversion programs that provide families with a one-time lump-sum payment for expenses and/or require up-front job search before being allowed to apply for cash assistance. Their analysis indicates substantial variation among states with regard to program conditions and requirements. In particular, the study examines the possible effects of diversion on an individual’s access to Medicaid, focusing on whether or not diverted families are ever linked with Medicaid even though they do not apply for cash welfare. Finally, it identifies areas of need for further research in monitoring the impact of diversion on Medicaid receipt and information on strategies to ensure access for Medicaid eligibles.