Over 600,000 New Jersey Residents to See $927 Million in Medical Debt Forgiven

Fourth round of state-backed medical debt relief pushes total forgiveness past $1.1 billion, benefitting more than three-quarters of a million New Jerseyans since 2024

In the latest expansion of New Jersey’s Medical Debt Relief Initiative, Governor Phil Murphy announced that approximately 629,000 residents will have a combined $927 million in medical debt eliminated through a partnership with Undue Medical Debt, a national nonprofit organization. This marks the fourth round of debt abolishment under the initiative, which has now retired over $1.1 billion in medical debt for more than 776,000 New Jerseyans since the program began in August 2024.

The effort is funded through $5.8 million in federal American Rescue Plan dollars allocated by the State to address burdensome medical expenses. In this latest round, Undue Medical Debt purchased portfolios of delinquent medical accounts from RWJBarnabas Health—the state’s largest integrated academic health system—as well as from the secondary debt market.

“Nobody should have to choose between their health and their financial stability. My Administration has pursued lasting systemic reforms to put more affordable health care in reach for New Jersey families and better protect our residents from accumulating debt,” said Governor Murphy. “Meanwhile, our work with Undue Medical Debt has provided tangible relief to hundreds of thousands of New Jersey families, retiring over $1 billion in medical debt. I am grateful to our partners in this space, and I look forward to continuing our work to build a healthier, more affordable New Jersey.”

Eligible recipients will receive official notification by mail over the coming weeks. Letters will come directly from Undue Medical Debt and indicate which portion of medical debt has been canceled.

"Medical debt is a silent crisis affecting millions of families, exacerbating health disparities and preventing far too many people from seeking the care they need. Debt relief efforts are essential not only for financial recovery, but for the well-being of our communities,” said New Jersey Department of Health Commissioner Kaitlan Baston, MD, MSc, DFASAM. “Health care should never be dictated by someone’s ability to pay. By addressing medical debt, we empower individuals to focus on their health and future rather than the burden of financial insecurity.”

There is no application process for the program. Instead, relief is determined automatically based on qualifying criteria: recipients must either have incomes at or below 400% of the federal poverty level or possess medical debts equal to 5% or more of their annual income. The forgiveness applies to medical accounts acquired in bundled debt portfolios, which are typically sold to third parties. Undue purchases these portfolios at low cost and erases the debt rather than collecting on it.

New Jersey is one of just five states in the U.S. that both prohibit the credit reporting of most medical debt and have invested public funds into direct debt relief. The initiative is part of a broader strategy by the Murphy administration to make health care more accessible and financially manageable. Additional state actions include cost caps on insulin and asthma inhalers, increased transparency in drug pricing, and enhanced regulation of pharmaceutical benefit managers.

This latest round of medical debt forgiveness significantly expands the impact of the state’s partnership with Undue Medical Debt and underscores ongoing efforts to support residents facing financial strain due to health care costs.