$86M In Medical Debt Eliminated For NJ Residents

Over 53,000 New Jersey residents will see a combined $86 million in medical bills abolished as part of the state’s ongoing partnership with the national nonprofit Undue Medical Debt, Governor Phil Murphy said on Friday.

To date, this partnership has seen nearly $1.4 billion in medical debt eliminated for over 828,000 New Jersey residents, Murphy said.

By leveraging $600,000 in American Rescue Plan funds from the state’s investment in medical debt abolishment, Undue has purchased this debt from provider partners. Undue-branded letters to impacted NJ residents began arriving in the mail on Dec. 27.

“With nearly $1.4 billion in medical debt abolished for hundreds of thousands of New Jersey residents, we are making a real, tangible impact and alleviating the burden of unpayable medical bills for our residents," Murphy said.

"Our partnership with Undue Medical Debt continues to build on my Administration’s efforts to create a more affordable and accessible health care system for all New Jerseyans,” he continued. “Nobody should have to delay life-saving care because they fear the crushing burden of medical debt or cut corners to ensure their basic health care needs are met."

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.

“Every dollar New Jersey invests in eliminating medical debt is an investment in better health for our state. Research consistently shows that medical debt drives people to forgo or delay care,” Acting Health Commissioner Jeff Brown said. “When families aren’t weighed down by past medical bills, they’re more likely to schedule screenings, keep doctor’s appointments, and address health issues before they become crises.”

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

There is no application process for medical debt relief. Undue purchases large, bundled portfolios of past-due medical debt belonging to those least able to pay for pennies or less on the dollar, and instead of trying to collect, they erase the debt.

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

Those benefiting from medical debt relief will receive an Undue-branded letter in the mail, officials said.

To learn more about Undue, you can click here. To learn more about medical debt relief and initiatives of the Office of Health Care Affordability and Transparency, you can click here.

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