TRENTON — Governor Phil Murphy announced a significant initiative aimed at reducing medical debt for thousands of New Jersey residents, leveraging over $550,000 in American Rescue Plan funds. The program, in partnership with Undue Medical Debt (Undue), will erase medical debt for 49,653 individuals across the state, wiping out a total of $100 million in debt.
This initiative targets 17,905 residents who owed $61.6 million to Prime Healthcare hospitals and 31,748 residents with debts exceeding $38.4 million owed to other providers through the secondary debt market, primarily collection agencies. Prime Healthcare collaborated with Undue to facilitate the sale of qualifying unpayable medical debts, making relief possible.
“When someone is sick or injured, their focus should be on recovery, not on how to pay for life-saving care,” Governor Murphy said. “This strategic investment and our partnership with Undue will eliminate burdensome medical debt for thousands of New Jersey families, making a real, tangible impact on their lives and furthering our efforts to create a more affordable and accessible health care system for all residents.”
Shabnam Salih, Director of the Office of Health Care Affordability and Transparency, emphasized the importance of this initiative, stating, “Today’s announcement lifts the burden of medical debt from tens of thousands of New Jersey residents. Alongside the recent signing of the Louisa Carman Medical Debt Relief Act, we are ensuring lasting protections against the unfair consequences of medical debt.”
The Louisa Carman Medical Debt Relief Act, recently signed by Governor Murphy, further safeguards New Jersey families from the accumulation of medical debt and protects against predatory debt collectors. It also prohibits the reporting of medical debt to credit agencies, making New Jersey one of only five states with such robust consumer protection measures.
Allison Sesso, CEO and president of Undue Medical Debt, praised the initiative, saying, “We hope this wave of medical debt relief encourages residents to re-engage with the healthcare system, providing both financial and emotional relief.”
Sonia Mehta, MD, CEO Region II and Chief Academic Officer for Prime Healthcare, added, “We are proud to partner with Governor Murphy and Undue on this initiative, which aligns with our mission of delivering exceptional, compassionate care while alleviating financial burdens for our patients.”
The relief program does not require an application process. Undue works with hospitals to purchase large portfolios of past-due medical debt, which is then erased rather than collected. Eligible individuals are either at or below four times the federal poverty level or have medical debts exceeding 5% of their annual income.
This one-time debt relief initiative aims to remove the financial strain on those least able to pay, providing a fresh start for thousands of New Jersey residents.
