New Jersey will eliminate more than $86 million in medical debt for over 53,000 residents under the Murphy administration’s sixth round of medical debt relief, Governor Phil Murphy announced Friday.
The relief is part of the state’s ongoing partnership with Undue Medical Debt, a national nonprofit that purchases past-due medical bills from health care providers and collection agencies and then abolishes them rather than seeking repayment.
With this latest round, the program has erased nearly $1.4 billion in medical debt for more than 828,000 New Jersey residents since its launch.
According to the administration, the state leveraged approximately $600,000 in American Rescue Plan funds to enable Undue to acquire the qualifying debt portfolios. Letters notifying affected residents began arriving in mailboxes on December 27.
Murphy said the initiative is intended to reduce financial barriers to health care and ease the burden of unpayable medical bills. “Nobody should have to delay life-saving care because they fear the crushing burden of medical debt,” the governor said in a statement.
There is no application process for the medical debt relief program. Undue purchases large bundles of past-due medical debt belonging to individuals least able to pay, often for pennies on the dollar, and then abolishes the debt entirely. To qualify, individuals must either be at or below 400% of the federal poverty line or have medical debt equal to at least 5% of their annual income. These criteria are the sole requirements for relief.
The program is source-based, meaning relief depends on hospitals, health systems, and collection agencies choosing to sell qualifying debt portfolios to Undue. Residents cannot request relief directly. Those whose debt has been abolished are notified by mail through an Undue-branded letter.