Murphy’s final medical debt relief round brings total to $1.5B

The basics:

• Nearly $16M in medical debt erased for about 14K New Jersey residents
• Funded with American Rescue Plan dollars, administered by Undue Medical Debt
• Total relief now nears $1.5B for more than 847K residents
• Program aims to help low-, moderate-income households with no application process

Gov. Phil Murphy announced the seventh round of New Jersey’s medical debt relief initiative Jan. 17, just days before his second and final term as the state’s governor came to a close.

This latest round eliminates nearly $16 million in medical debt for almost 14,000 residents. The relief comes through a continued partnership with national nonprofit Undue Medical Debt. It also follows closely on the heels of a sixth round that eliminated more than $86 million in medical debt for over 53,000 residents.

Using about $165,000 in American Rescue Plan funds for this phase, the state helped Undue purchase qualifying medical debt on the secondary market and abolish it outright.

Letters notifying affected residents should arrive in the coming weeks. Since Murphy first proposed the program in his 2023 Budget Address, the initiative has erased nearly $1.5 billion in medical debt for more than 847,500 New Jerseyan. The initiative began with a $10 million state investment in fiscal year 2024.

‘Impossible choices’

Murphy said medical debt should never stand between residents and the care they need.

“Too often, families are forced to make impossible choices after a health crisis, facing bills that grow faster than their ability to pay,” said Murphy. “Since day one, we have governed with the principle that health care is a right, not a privilege – and, across government, we have worked to break down barriers to accessing affordable services.

“By retiring this debt in partnership with Undue Medical Debt, we are easing a financial burden that has weighed on hundreds of thousands of households and taking a concrete step toward a health care system that puts people first – one that is fairer, more compassionate, and more accessible for everyone.”

Too often, families are forced to make impossible choices after a health crisis, facing bills that grow faster than their ability to pay.
– Gov. Phil Murphy

How it works

There is no application process for relief. Undue identifies and purchases qualifying medical debt for residents earning up to 400% of the federal poverty level or carrying medical debt equal to at least 5% of their income, then erases it. The one-time intervention aims at easing both financial and health-related stress.

Acting Health Commissioner Jeff Brown said the stress of medical debt affects health as surely as any diagnosis.

“Financial insecurity contributes to anxiety, delayed care, and worsening conditions,” said Brown. “This relief isn’t just an economic measure – it’s a public health intervention.”

Bigger picture

The Murphy administration framed the program as part of a broader health care affordability agenda. In addition to direct debt abolishment, the administration noted it has prohibited most medical debt reporting to credit agencies, capped out-of-pocket costs for insulin and asthma inhalers, increased transparency in the pharmaceutical supply chain and strengthened oversight of pharmacy benefit managers.

It’s a massive accomplishment that the administration is closing out its term with well over one billion dollars erased for hundreds of thousands of New Jersey families.
– Allison Sesso, president and CEO, Undue Medical Debt

Undue says Murphy and the State of New Jersey have been a valued partner since the summer of 2024, when $100 million of medical debt relief was announced for nearly 50,000 families.

“It’s a massive accomplishment that the administration is closing out its term with well over one billion dollars erased for hundreds of thousands of New Jersey families,” said Allison Sesso, president and CEO of Undue Medical Debt. “The numbers are staggering, but beneath the figures are real people — neighbors, coworkers and community members who have been gifted the emotional and financial benefit of medical debt relief.

“And I extend a sincere thank you to all of the providers — hospitals, physicians’ groups and more who have enabled us to erase these burdensome debts of necessity.”