Phil Murphy on Tuesday announced the eighth and final round of the state’s historic medical debt relief initiative, eliminating approximately $100 million in medical bills for an estimated 60,000 New Jersey residents.
This final installment marks the conclusion of a multi-year partnership with the national nonprofit Undue Medical Debt (formerly RIP Medical Debt). Since its launch, the program has wiped away a staggering $1.6 billion in debt for more than 907,500 people across the Garden State.
The initiative, first proposed in the governor’s 2023 budget address, utilized roughly $11 million in total grants—including $1 million in American Rescue Plan funds for this final round—to purchase past-due medical debts from major New Jersey hospital systems.
“Medical debt has become a quiet crisis across our nation, trapping families in financial instability through no fault of their own,” Murphy said. “Abolishing medical debt… is about restoring dignity, relieving families of crushing anxiety, and making clear that health care should be about healing.”
There is no application process for this relief. Undue Medical Debt uses a sophisticated data-driven approach to identify and purchase large “portfolios” of debt belonging to those least able to pay.
| Criteria for Relief | Description |
| Income Threshold | Household income at or below 400% of the Federal Poverty Level. |
| Debt Burden | Medical debt totaling 5% or more of the household’s annual gross income. |
| Notification | Eligible residents will receive an Undue-branded letter in the mail within the coming weeks. |
The debt relief program is a cornerstone of the broader Louisa Carman Medical Debt Relief Act, signed in 2024. Named in honor of a young staffer in the Governor’s office, the Act provides long-term structural protections for New Jerseyans:
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Credit Reporting Ban: Prohibits medical creditors from reporting debt to credit agencies for most health care services.
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Interest Caps: Limits interest rates on medical debt to 3% per year.
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Wage Garnishment Limits: Protects residents with incomes below 600% of the federal poverty level from having their wages garnished for medical bills.
