Mercer Times

Governor Phil Murphy has announced a significant initiative to alleviate medical debt for nearly 50,000 residents in New Jersey. By utilizing over $550,000 from the American Rescue Plan and collaborating with Undue Medical Debt, the state aims to eliminate substantial amounts of debt for many individuals.

The effort will see 17,905 residents relieved of $61.6 million owed to Prime Healthcare hospitals, while another 31,748 residents will have over $38.4 million in debts forgiven from other providers via the secondary debt market. This initiative is made possible through a partnership where Prime Healthcare sold qualifying unpayable medical debts for relief.

Governor Murphy stated, "When someone is sick or injured, they should be able to focus on what matters most – getting better – rather than worrying about how they will pay for the life-saving care and services rendered to them." He emphasized that this investment would make a tangible impact by erasing debts and improving healthcare accessibility for New Jersey families.

Shabnam Salih, Director of the Office of Health Care Affordability and Transparency, remarked on the importance of this move: “Today’s announcement will lift the burden of medical debt from tens of thousands of NJ residents and families.” She also highlighted recent legislation like the Louisa Carman Medical Debt Relief Act as part of ongoing efforts to protect consumers.

The Louisa Carman Medical Debt Relief Act prohibits credit reporting agencies from documenting medical debt and defends against predatory collectors. New Jersey stands out as one of five states implementing such consumer protections while funding direct debt relief.

Allison Sesso, CEO and president of Undue Medical Debt, expressed her enthusiasm: “We hope the tens of thousands of recipients in this first wave of medical debt relief are encouraged to re-engage with the healthcare system.” Sonia Mehta from Prime Healthcare echoed these sentiments, praising Governor Murphy's leadership in alleviating burdens for vulnerable patients.

No application process exists for this relief; instead, Undue purchases bundled portfolios of past-due debts and forgives them. Eligible recipients must either earn below four times the federal poverty level or have debts comprising at least 5% of their annual income. Beneficiaries will receive notification letters beginning August 19, 2024.