More than 20,000 New Jersey residents will have their medical debt erased as part of the latest phase of the Murphy Administration’s ongoing partnership with Undue Medical Debt. This third round of debt abolishment, amounting to over $26 million, is made possible through the use of approximately $270,000 in American Rescue Plan funds, allowing Undue to purchase and retire debt from the secondary market. Impacted individuals can expect notification letters in the mail within the coming week.
Since the program’s inception, the initiative has eliminated $246 million in medical debt for 147,000 New Jersey residents. The effort is part of a broader strategy to make health care more affordable and accessible, reducing financial burdens that often prevent individuals from seeking necessary medical treatment.
Medical debt relief in New Jersey is supported by key consumer protection policies that prohibit credit reporting for most medical debts. The state is one of only five in the nation that both prevents medical debt from impacting credit scores and allocates funding for direct debt relief. Additional measures have also been introduced to improve affordability, including caps on out-of-pocket costs for prescription medications such as insulin and asthma inhalers, as well as oversight of pharmaceutical benefits management companies.
Undue Medical Debt’s model involves purchasing bundled portfolios of past-due medical debt from physicians’ groups and collection agencies at a fraction of their original value. Rather than attempting to collect on these debts, the organization erases them, providing financial relief to residents who qualify. Eligibility criteria include an income at or below 400% of the federal poverty level or medical debts totaling at least 5% of an individual’s annual income.
This latest round of medical debt forgiveness represents a continued effort to ease financial hardships for New Jersey families while ensuring greater access to health care. The initiative relies on collaboration with hospitals and collection agencies willing to participate in the debt relief program, reinforcing the administration’s commitment to consumer-focused health care reforms.
No application is required for participation in the program, and eligible individuals will receive notification by mail.