Major medical debt relief is coming to NJ. More than 600,000 New Jersey residents will see nearly $1 billion in medical debt erased in the latest phase of a statewide relief effort, officials announced on Monday.
Gov. Phil Murphy announced the fourth round of debt forgiveness under New Jersey’s partnership with Undue Medical Debt, a nonprofit that buys and cancels medical bills. The state has now relieved over $1.1 billion in medical debt for 776,000 people since they began the program in August 2024.
The latest round targets $927 million in debt purchased from RWJBarnabas Health and the secondary debt market using $5.8 million in federal American Rescue Plan funds.
“Nobody should have to choose between their health and their financial stability,” Murphy said of the program.
Undue Medical Debt acquires bundled portfolios of overdue bills owed by patients with limited ability to pay. Rather than collect, the group forgives the debt outright. Qualifying residents will receive notification by mail in the coming weeks.
Eligibility is based on income—either at or below 400% of the federal poverty level—or if a person’s medical debt equals at least 5% of their annual income. No application is required.
The initiative follows the passage of the Louisa Carman Medical Debt Relief Act, which restricts debt reporting and curbs collection efforts on medical bills.
New Jersey was the first state to fund this type of large-scale relief using federal pandemic recovery money.
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.