TRENTON, N.J. — Nearly 20,000 New Jersey residents will have a combined $90 million in medical debt eliminated in the final round of a state program that has erased more than $1.6 billion in debt, according to the New Jersey Department of Health.
The Office of Healthcare Affordability and Transparency announced the latest round of relief in partnership with the nonprofit Undue Medical Debt. The program used state funding and one-time federal American Rescue Plan funds to purchase qualifying medical debt from health care providers and eliminate it.
Over the course of the program, which began in 2023, nearly 900,000 New Jersey residents have had more than $1.6 billion in medical debt eliminated, according to the department. Earlier this year, NJDOH reported that the program had already eliminated nearly $1.4 billion for more than 828,000 residents.
Residents receiving relief in the latest round will receive letters from Undue Medical Debt. No action is required from recipients.
“Across the country and here in New Jersey, families are struggling to stay afloat as rising healthcare costs force too many people to choose between seeing a doctor, filling a prescription, and paying for everyday necessities,” said Governor Mikie Sherrill. “While the federal government is cutting access to affordable healthcare, my Administration is focused on ensuring our communities can access the best possible care without fear of collecting mountains of medical debt. We will continue fighting to lower costs, protect coverage, and make high-quality healthcare more accessible and affordable for New Jersey families.”
“Medical debt is a symptom of the problem in our healthcare system: Care that is too costly for too many people, creating an unjust burden,” said Dr. Raynard E. Washington, New Jersey Health Commissioner. “We will never succeed at closing wide gaps in life expectancy until all our residents can afford to access basic healthcare, and we will never lower costs if we do not emphasize access to primary care and avoiding costly hospitalizations.”
To qualify for the debt relief, residents had to have household income at or below 400% of the federal poverty level or medical debt equal to at least 5% of their annual income. The state’s Office of Healthcare Affordability and Transparency describes its partnership with Undue Medical Debt as an effort to purchase and abolish qualifying medical debts for New Jersey residents.
“I’m grateful for the state of New Jersey’s partnership, which has now erased an additional $90 million in medical debt for more than 21,000 New Jersey residents,” said Allison Sesso, President and CEO of Undue Medical Debt. “I’m also grateful to Governor Sherrill for her continued commitment to healthcare affordability and removing barriers to care for burdened patients while empowering providers to keep families healthy. No one chooses to get sick, be in an accident or have a chronic condition. At a time when budgets are tight, this program is one clear example of how New Jersey has stepped up to ease the burden on those who need it most.”
The release describes the latest round as affecting nearly 20,000 residents, while Sesso’s statement says more than 21,000 residents. The department did not explain the difference in the figures.
“It has been exciting to see the impact that these funds have had on New Jerseyans burdened with medical debt,” said James Lloyd, Director of the Office of Healthcare Affordability and Transparency. “Relief from debt can be critically important for those families who receive it, and we have to work together to make care more affordable for everyone.”
With the program’s funding now fully spent, NJDOH said the medical debt elimination initiative is complete.
The department said it will continue efforts aimed at health care affordability through OHCAT, which studies health care spending and cost increases in the state. Research released by the office in January found that prices, rather than increased use of health care services, were a primary driver of cost increases in New Jersey’s commercial insurance market.
