Final Round of New Jersey Medical Debt Relief Forgives $100 Million for 60,000 Residents

State’s $10M investment concludes with $1.6 billion in total debt abolished for over 900,000 New Jerseyans since program launch

TRENTON — In the final phase of its statewide Medical Debt Relief Initiative, Governor Phil Murphy’s administration announced that approximately 60,000 New Jersey residents will see $100 million in medical debt erased. The relief is part of an ongoing public-private partnership with national nonprofit Undue Medical Debt, funded by the American Rescue Plan. This announcement was made on the last day of Governor Murphy's time in office.

This eighth and final round brings the program’s cumulative totals to approximately $1.6 billion in medical debt abolished for more than 907,500 residents since the initiative’s inception in 2023.

Using a $1 million portion of federal relief funds, the State enabled Undue to purchase bundled portfolios of past-due medical debt from a major New Jersey hospital system. Rather than attempting to collect the debt, Undue will discharge it. Impacted residents will be notified via mail in the coming weeks with a branded letter confirming the forgiveness.

This initiative is part of a broader effort by the Murphy administration to reduce the burden of health care costs across the state. The partnership with Undue was first proposed in the Governor’s Fiscal Year 2024 budget, which allocated $10 million in total for medical debt relief. The model, which does not require residents to apply, targets low-income individuals—either those earning up to 400% of the federal poverty line or those whose medical debt amounts to 5% or more of their annual income.

The relief is automatic and dependent on the cooperation of hospitals and secondary debt buyers who agree to sell qualifying medical debt to Undue at a discounted rate.

New Jersey is among the first states to pair direct medical debt forgiveness with broader legal protections. Notably, the Louisa Carman Medical Debt Relief Act, signed into law in 2023, prohibits most medical debt from appearing on residents’ credit reports and places limits on interest rates.

Beyond debt relief, the Murphy administration has pursued several health affordability reforms, including capping out-of-pocket costs for insulin and asthma inhalers, regulating pharmacy benefit managers, and promoting transparency in prescription drug pricing.

The State’s debt relief initiative reflects a growing public focus on the financial impact of medical expenses. According to recent polling cited by the administration, 76% of voters support state-level protections against medical debt.

Undue Medical Debt, the nonprofit partner in the initiative, specializes in purchasing and abolishing medical debt nationwide. Its process targets those most financially vulnerable and has been used by municipalities, health systems, and philanthropic organizations to alleviate debt burdens without requiring repayment.

New Jersey residents who benefit from this round of debt relief will receive official notification by mail. No action is required to qualify.