Governor Phil Murphy announced Tuesday that an estimated 60,000 New Jersey residents will have approximately $100 million in medical debt abolished under the Murphy Administration’s eighth and final round of medical debt relief.
The latest round is part of the state’s ongoing partnership with national nonprofit Undue Medical Debt, which purchases qualifying medical debt for pennies on the dollar and eliminates it rather than attempting collection. The initiative leverages approximately $1 million in American Rescue Plan funds, which Undue used to purchase debt from a major New Jersey hospital system. Letters notifying affected residents are expected to arrive in the coming weeks.
First proposed during the governor’s 2023 budget address, the program has resulted in the elimination of approximately $1.6 billion in medical debt for more than 907,500 New Jersey residents. The effort initially utilized a $10 million state grant in Fiscal Year 2024.
State officials noted that the medical debt relief program complements other consumer protection measures enacted during the Murphy Administration, including prohibiting most medical debt from being reported to credit agencies and advancing policies aimed at lowering prescription drug costs.
There is no application process for the debt relief. Undue purchases large portfolios of past-due medical debt belonging to individuals who are least able to pay, then erases the balances.
To qualify, individuals must be at or below 400 percent of the federal poverty line or have medical debt equal to at least 5 percent of their annual income. Relief is one-time and source-based, depending on participating hospitals and collection agencies.
Residents whose debt has been eliminated will be notified by mail through an Undue-branded letter.