Through the state’s partnership with Undue Medical Debt, New Jersey Gov. Phil Murphy announced that 77,000 eligible individuals and families will benefit from the elimination of $120 million in medical debt.
This is the second time the state has partnered with Undue Medical Debt, a charity that buys and erases medical debt for people who qualify based on income. Undue works with hospitals across the United States to purchase past-due medical debt for pennies on the dollar. It buys portfolios belonging to those least able to pay, then erases the debt.
The state is spending $900,000 of leftover federal COVID-19 funds to retire the medical debt for 77,000 New Jersey residents. Affected residents may have all or some of their debts abolished, according to the state.
About 11% of New Jersey residents had medical debt as of 2022, according to the latest figures from the research nonprofit Urban Institute. The burden falls heaviest on people of color, with 16% of minority residents struggling with unpaid bills compared to about 8% of white New Jerseyans.
“Investing in affordable and accessible health care allows residents to prioritize their well-being without having to take on the significant burdens of medical debt, which has long served as a debilitating barrier to receiving the life-saving care and services they deserve,” said Murphy.
“That is why our Administration has taken action to both protect residents from accumulating debt and eliminate existing debt so that New Jerseyans can focus on what matters most: their health. Today’s announcement marks a monumental step forward and builds upon our efforts to create a health care system that relieves financial constraints and ensures quality, comprehensive care is within reach of every New Jerseyan,” Murphy added.
“With Governor Murphy’s persistent focus on health care affordability and access for New Jerseyans, we are pleased to announce another round of medical debt abolishment for tens of thousands of residents and families,” said Shabnam Salih, Director of the Office of Health Care Affordability and Transparency.
“Today’s announcement is lifting the burden of $120 million in debt off their shoulders, helping to bring some peace of mind and comfort next time they have to see a doctor or visit the hospital for care,” Salih added.
Safeguarding Families From Accumulating Medical Debt
Earlier this year, the Governor signed the Louisa Carman Medical Debt Relief Act, which safeguards New Jersey families from accumulating medical debt, protects against predatory medical debt collectors, and prohibits the reporting of medical debt to credit reporting agencies.
New Jersey is a leading state in consumer protection policies and supports for residents, being one of only five states in the nation that both prohibits medical debt reporting to credit agencies and has allocated funding to provide residents with direct medical debt relief.
“We’re proud to partner with the state of New Jersey, Governor Murphy and Atlantic Health on this impactful medical debt abolishment that follows closely on the heels of the initial $100 million of medical debt already erased,” said Undue Medical Debt CEO and president Allison Sesso.
“New Jersey is a great example of a state that’s erasing medical debts weighing down its most financially burdened residents while also taking legislative action to lessen the burden of medical debt overall,” Sesson added.
Those who qualify for medical debt relief are either four times or below the federal poverty level or have medical debts that equal 5% or more of their annual income. These are the only criteria for relief. For this round of debt abolishment, Undue worked with Atlantic Health System to identify unpaid medical debts that qualify for erasure.
This is a one-time abolishment to help remove the financial and emotional burden of unpayable medical debts. Medical debt relief is source-based, depending on community-minded providers like hospitals who choose to engage.
Those benefiting from medical debt relief will receive an Undue branded letter in the mail beginning Thursday, Oct. 17. Learn more about Undue here.