Governor Phil Murphy’s administration announced a new round of medical debt relief on Wednesday, marking the fifth phase of a statewide initiative that has so far erased more than $1.3 billion in medical debt for New Jersey residents.
The latest effort, carried out in partnership with the national nonprofit Undue Medical Debt (Undue), will eliminate approximately $59 million in medical bills owed by more than 48,000 residents across the state. The program is funded through $500,000 in federal American Rescue Plan dollars allocated by the Murphy administration to address medical debt.
Undue purchases qualifying medical debt from hospitals, health systems, and secondary market holders such as collection agencies and debt buyers for pennies on the dollar. Rather than collect on the debt, the organization cancels it entirely. Beneficiaries receive an Undue-branded letter notifying them that their debt has been erased; no application or action is required.
Eligibility for the program includes individuals with household incomes at or below 400% of the federal poverty line or those whose medical debt equals 5% or more of their annual income.
New Jersey has positioned itself as a national leader in consumer protection policies targeting medical debt. The state prohibits credit reporting for most medical debts and has implemented measures to increase transparency and affordability in health care, including caps on out-of-pocket costs for insulin and asthma inhalers, oversight of pharmaceutical benefit managers, and reforms aimed at lowering prescription drug prices.
