Gov. Murphy announces sixth round of medical debt relief, eliminating $86 million for more than 53,000 residents

TRENTON, N.J. — Gov. Phil Murphy announced Friday that more than 53,000 New Jersey residents will see a combined $86 million in medical debt eliminated as part of the state’s sixth round of medical debt relief.

The latest round brings New Jersey’s total medical debt relief to nearly $1.4 billion for more than 828,000 residents through the state’s ongoing partnership with the national nonprofit Undue Medical Debt.

By leveraging about $600,000 in federal American Rescue Plan funds, Undue purchased qualifying medical debt from provider partners and abolished it rather than attempting to collect it. Undue-branded letters notifying eligible residents began arriving in the mail on Dec. 27, 2025, state officials said.

“With nearly $1.4 billion in medical debt abolished for hundreds of thousands of New Jersey residents, we are making a real, tangible impact and alleviating the burden of unpayable medical bills for our residents,” Murphy said. “Our partnership with Undue Medical Debt continues to build on my Administration’s efforts to create a more affordable and accessible health care system for all New Jerseyans. Nobody should have to delay life-saving care because they fear the crushing burden of medical debt or cut corners to ensure their basic health care needs are met.”

Undue Medical Debt CEO and President Allison Sesso praised New Jersey’s efforts, calling the milestone a national model.

“I’m thrilled to see New Jersey reach this historic milestone of nearly $1.4 billion in medical debt erased for over 822,000 residents,” Sesso said. “At a time when the medical debt crisis is on track to get even worse, New Jersey stands as a national leader — not only providing direct relief, but also enacting critical protections like prohibiting medical debt from appearing on credit reports. No one chooses to get sick, be in an accident, or have a chronic illness, and I’m grateful for the provider partners who continue working with us to ensure medical debt doesn’t prevent people from seeking the care they need. We’re proud that tens of thousands more families will soon receive this welcome news in the mail.”

Acting Health Commissioner Jeff Brown said eliminating medical debt can have a direct impact on health outcomes.

“Every dollar New Jersey invests in eliminating medical debt is an investment in better health for our state,” Brown said. “Research consistently shows that medical debt drives people to forgo or delay care. When families aren’t weighed down by past medical bills, they’re more likely to schedule screenings, keep doctor’s appointments, and address health issues before they become crises.”

James Lloyd, director of the Office of Health Care Affordability and Transparency, said the partnership with Undue is a key component of the state’s broader health care affordability strategy.

“With today’s announcement, we are alleviating more than $86 million in burdensome medical debt from tens of thousands of New Jerseyans, providing direct relief to our communities as we work toward a better, more affordable health care system,” Lloyd said. “Our partnership with Undue Medical Debt has provided direct help to many vulnerable New Jerseyans, and is a vital piece of the State’s larger efforts to address the crisis of medical debt among our residents.”

The medical debt relief initiative builds on other consumer protection efforts advanced under Murphy’s administration, including the Louisa Carman Medical Debt Relief Act, which prohibits most medical debt from appearing on credit reports. New Jersey is among the first states to both restrict medical debt reporting and allocate public funding for direct medical debt relief.

There is no application process for the program. Undue purchases large portfolios of past-due medical debt belonging to individuals least able to pay and abolishes the debt. Those eligible are either at or below 400% of the federal poverty level or have medical debt equal to at least 5% of their annual income. Relief is granted on a one-time basis, and beneficiaries are notified by mail.