NJ Residents To See $1.1B Of Medical Debt Eliminated In Fourth Round Of Relief

NEW JERSEY — More than 600,000 NJ residents will soon see a combined $927 million in medical debt relief through the state's partnership with Undue Medical Debt, Governor Phil Murphy announced Monday, bringing the total debt forgiven to over $1.1 billion for 776,000 New Jerseyans since August 2024.

By leveraging $5.8 million in American Rescue Plan funds from the state’s investment in medical debt abolishment, officials said Undue has purchased a fourth round of medical debt from RWJBarnabas Health (New Jersey’s largest integrated academic health system) and from the secondary debt market.

According to officials, Undue purchases large, bundled portfolios of past-due medical debt belonging to those least able to pay, and instead of trying to collect, Undue erases the debt.

Throughout the coming weeks, over half a million households will receive an Undue Medical Debt-branded letter in the mail informing them that some, or all, of their medical debt has been abolished.

“Nobody should have to choose between their health and their financial stability,” Murphy said. “My administration has pursued lasting systemic reforms to put more affordable health care in reach for New Jersey families and better protect our residents from accumulating debt.”

“Meanwhile, our work with Undue Medical Debt has provided tangible relief to hundreds of thousands of New Jersey families, retiring over $1 billion in medical debt,” Murphy continued. “I am grateful to our partners in this space, and I look forward to continuing our work to build a healthier, more affordable New Jersey.”

In August 2024, the governor’s office announced its plans to use federal American Rescue Plan funds to become the first state in the U.S. to wipe out nearly $100 million in medical debt.

The announcement followed the signing of the Louisa Carman Medical Debt Relief Act, which protects NJ families from accumulating medical debt and medical debt collectors. The legislation also prohibits the reporting of medical debt to credit reporting agencies.

“When someone is sick or injured, they should be able to focus on what matters most – getting better – rather than worrying about how they will pay for the life-saving care and services rendered to them," Murphy said. "New Jerseyans should not have to scrimp and save to ensure their basic health care needs are met, or to pay down lofty medical debts resulting from tragic accidents or devastating diagnoses."

To qualify for medical debt relief, NJ residents must either be at or below 400% of the federal poverty line or have medical debts that equal 5% or more of their annual income.

There is no application process to obtain relief, officials said.

Medical debt relief is source-based and cannot be requested, depending on community-minded providers like hospitals and secondary market partners such as collection agencies, who choose to engage and sell their qualifying medical debt.

Those benefitting from medical debt relief will receive an Undue-branded letter in the mail and can learn more about Undue here.

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