This round of debt relief will benefit approximately 629,000 residents, specifically targeting those at or below 400% of the federal poverty line or with medical debts exceeding 5% of their annual income.

Governor Phil Murphy announced a new debt relief initiative in partnership with Undue Medical Debt and RWJBarnabas Health, aimed at alleviating the financial burden of medical debt for New Jersey residents.

New Jersey is one of only five states that prohibit medical debt reporting to credit agencies, which helps protect residents from the long-term impacts of medical debt.

The program operates without an application process; affected households will receive notifications from Undue Medical Debt regarding the cancellation of their debts.

Undue Medical Debt CEO Allison Sesso expressed pride in surpassing the milestone of $1.1 billion in medical debt erased for over 776,000 New Jerseyans since the program's launch in August 2024.

Governor Murphy highlighted the importance of healthcare affordability and financial stability, asserting that no one should have to choose between their health and financial security.

The initiative works by purchasing delinquent medical accounts from health providers and the secondary debt market, allowing for debt forgiveness instead of collection.

The debt being forgiven was acquired from RWJBarnabas Health, New Jersey's largest healthcare provider, as well as from various collection agencies.

New Jersey ranks 11th in the nation for healthcare costs, with residents spending over $3,157 daily on hospital bills and more than $11,000 annually on healthcare.

Approximately 11% of New Jersey residents have medical debt sent to collections, with minority populations disproportionately affected, highlighting the urgent need for initiatives like this.

State Health Commissioner Dr. Kaitlan Baston referred to medical debt as a 'silent crisis,' emphasizing the need for accessible healthcare regardless of financial circumstances.

In addition to this debt relief initiative, the state has implemented measures such as cost caps on essential medicines and increased transparency in drug pricing to make healthcare more affordable.