By: Richard L. Smith
New Jersey officials announced another major round of medical debt forgiveness this week, wiping out $86 million in unpaid medical bills for more than 53,000 residents.
The latest action, part of the Murphy Administration’s partnership with national nonprofit Undue Medical Debt — brings total forgiven medical debt in the state to nearly $1.4 billion since the program began, benefiting more than 828,000 New Jerseyans.
Funded through roughly $600,000 in federal American Rescue Plan dollars, the program allows Undue to purchase bundled portfolios of past-due medical debt from hospitals and collection agencies for pennies on the dollar and then cancel it entirely. qualifying residents do not need to apply; instead, they receive a letter in the mail notifying them that their debt has been erased.
The newest letters began going out in late December.
State officials say the effort is easing a major financial and emotional burden for families and helping people stay engaged in their health care.
Many residents, especially those who have struggled with high medical costs, are welcoming the move as real relief that will help them save money and stabilize their budgets.
Governor Phil Murphy said the initiative is part of a broader push to make health care more affordable and prevent residents from delaying treatment out of fear of debt.
The state has also enacted new consumer protections, including a law preventing most medical debt from appearing on credit reports.
To qualify for forgiveness, residents must either earn at or below 400 percent of the federal poverty level or have medical debt totaling at least 5 percent of their annual income.
Undue Medical Debt acquires and abolishes only debt that meets those criteria, working with providers who choose to participate.
Officials say the program continues to place New Jersey among the nation’s leaders in medical debt relief, and for many households, the latest round of forgiveness represents meaningful savings and a welcome sense of financial breathing room.