Governor Murphy Announces $100 Million in Medical Debt Relief for Nearly 50,000 New Jersey Residents

Thousands of New Jerseyans will see their medical debt erased, thanks to a state initiative aimed at reducing the financial burden of health care costs.

Governor Phil Murphy announced a major initiative today to eliminate $100 million in medical debt for nearly 50,000 residents across New Jersey. The effort, funded by over $550,000 from the American Rescue Plan and in partnership with Undue Medical Debt, will provide significant financial relief to individuals and families struggling with unpayable medical expenses.

“When someone is sick or injured, they should be able to focus on what matters most – getting better – rather than worrying about how they will pay for the life-saving care and services rendered to them. New Jerseyans should not have to scrimp and save to ensure their basic health care needs are met, or to pay down lofty medical debts resulting from tragic accidents or devastating diagnoses,” said Governor Murphy. “Medical debt accumulates very quickly and can follow a person for decades. With this strategic investment and our partnership with Undue, we are wiping the slate clean for thousands of New Jersey families, eliminating their debt, and making a real, tangible impact on their lives.”

The relief initiative targets 17,905 residents who owed $61.6 million to Prime Healthcare hospitals, as well as 31,748 residents with over $38.4 million in medical debt owed to other providers, primarily through secondary debt markets like collections agencies. Through a collaboration with Undue, Prime Healthcare sold qualifying medical debts for the purpose of relief, leading to their erasure rather than collection.

This announcement comes on the heels of the Louisa Carman Medical Debt Relief Act, a law designed to protect New Jersey families from the pitfalls of medical debt, including predatory collection practices and credit reporting. New Jersey is among only five states in the nation that both prohibits the reporting of medical debt to credit agencies and provides direct relief through allocated funds.

“As the leader of a nonprofit based in the tri-state area it’s thrilling to see this magnitude of medical debt relief for New Jersey residents across the state,” said Allison Sesso, CEO and president of Undue Medical Debt. “We hope the tens of thousands of recipients in this first wave of medical debt relief are encouraged to re-engage with the healthcare system and feel both financial and emotional relief. No one chooses to get sick, be in an accident or have a chronic illness and we look forward to helping even more people over the course of this partnership with New Jersey government.”

The relief process is automatic, with no application required. Undue works by purchasing large portfolios of overdue medical debt from hospitals and other providers and then abolishing the debt for those who qualify. Eligible individuals are those whose incomes are four times or less the federal poverty level or who have medical debts equaling 5% or more of their annual income.

Beginning August 19, 2024, residents benefiting from this relief will receive a letter from Undue confirming the elimination of their medical debt. This initiative is a one-time effort designed to alleviate the financial and emotional stress associated with overwhelming medical bills, relying on the cooperation of health care providers like Prime Healthcare.

For more information on Undue and the medical debt relief process, visit their website.