Governor Phil Murphy announced Monday that an additional 629,000 residents will have a combined $927 million in medical debt erased through the state’s continued partnership with Undue Medical Debt, a national nonprofit dedicated to abolishing unpayable medical bills.
This latest round of relief brings the total debt abolished in New Jersey to over $1.1 billion, impacting 776,000 residents since the program launched in August 2024. The effort is funded through $5.8 million in American Rescue Plan funds, a modest investment with outsized impact that has transformed lives across the state.
Undue Medical Debt used the funds to purchase portfolios of medical debt from RWJBarnabas Health, the state’s largest health system, as well as from the secondary debt market. Residents who qualify for relief — either by earning less than 400% of the federal poverty line or having medical debt totaling at least 5% of their annual income — will soon receive letters in the mail notifying them that some or all of their medical debt has been eliminated.
There is no application process for the program. Undue identifies and purchases eligible debt directly from providers and collection agencies, then forgives it, providing families with financial breathing room at no cost to them.
This initiative builds on a broader set of health care affordability reforms championed by the Murphy Administration, including banning credit reporting of most medical debt, capping out-of-pocket insulin and inhaler costs, and implementing new oversight over pharmaceutical benefit managers. New Jersey is now one of only five states that both prohibits medical debt from being reported to credit bureaus and has publicly funded direct debt relief.
For residents impacted by the latest round of relief, a branded letter from Undue Medical Debt will arrive in the mail in the coming weeks, providing confirmation that their debt has been officially abolished.