New Jersey Forgives $59 Million in Medical Debt for Over 48k Residents in Latest Relief Round

The state’s fifth collaboration with Undue Medical Debt brings total forgiven medical debt to over $1.3 billion for more than 780,000 New Jerseyans.

MORRISTOWN, NJ — Governor Phil Murphy has announced the latest expansion of New Jersey’s Medical Debt Relief Initiative, eliminating more than $59 million in medical debt for over 48,000 residents. This fifth round of debt forgiveness is part of an ongoing partnership with the national nonprofit Undue Medical Debt and is funded through federal American Rescue Plan dollars.

Approximately $500,000 in federal funds were allocated to purchase bundled portfolios of unpaid medical debt from hospitals, collection agencies, and other secondary markets. The nonprofit then forgives the debts, with impacted individuals expected to receive notification via mail in the coming days.

With this latest round, New Jersey’s total medical debt forgiveness has surpassed $1.3 billion, benefiting over 780,000 residents statewide. The program targets individuals who either fall below 400% of the federal poverty line or whose medical debt exceeds 5% of their annual income. Relief is automatic and does not require applications.

“With each round of debt relief, we are reinforcing our commitment that health care is a right, not a privilege reserved for those who can afford it," said Acting New Jersey Health Commissioner Jeff Brown.

According to the Governor’s Office, the initiative supports broader goals to improve affordability and consumer protections in healthcare. Additional state policies complementing this effort include:

• Bans on medical debt reporting to credit agencies for most types of debt

• Caps on out-of-pocket costs for insulin and asthma inhalers

• Pharmaceutical supply chain reforms and regulation of pharmacy benefit managers

New Jersey is among the first states to fund direct medical debt relief while also restricting credit reporting practices. These measures aim to prevent long-term financial harm for residents unable to pay for essential healthcare services.

The Medical Debt Relief Initiative works by acquiring past-due medical debt for "pennies on the dollar," targeting those least able to pay. Once purchased by Undue, the debt is erased. The program depends on the participation of hospitals, health systems, and debt buyers who voluntarily sell qualifying accounts.

For more information on the program and to learn about Undue Medical Debt, visit: unduemedicaldebt.org.

Editor’s Note: Recipients of debt relief will receive official communications by mail from Undue Medical Debt. Eligibility is determined by financial criteria and the availability of qualifying debt in the marketplace. This program does not accept individual applications.