Mercer Times

Governor Phil Murphy has enacted the Louisa Carman Medical Debt Relief Act, a new law aimed at protecting New Jersey residents from falling into medical debt and shielding them from aggressive debt collection practices. The legislation is named after Louisa Carman, a member of the Governor’s Office who played a significant role in developing the proposal before her untimely death.

Governor Murphy emphasized the importance of the act, stating, “With this legislation, we honor Louisa by carrying forward her mission to ensure every New Jerseyan can access the health care they deserve without breaking the bank.” He added that it represents a significant step toward making healthcare more affordable and accessible across New Jersey.

Lieutenant Governor Tahesha Way highlighted the timing of this legislation, noting that over ten percent of New Jersey residents have medical debt in collections. She said, “This Louisa Carman Medical Debt Relief Act would not exist without her passion and advocacy and it will help thousands of families access the care they need and deserve without fear of financial ruin.”

The bill introduces several protections for patients with medical debt. It prohibits reporting unpaid medical debts to consumer reporting agencies for services performed after its enactment. Additionally, it restricts charging interest rates above three percent annually on medical debts and prevents wage garnishment for individuals earning less than 600 percent of the federal poverty level.

The legislation also provides that any violation by a medical creditor or collector could result in civil penalties and require restitution to affected parties. The bill was sponsored by Senators Shirley K. Turner and M. Teresa Ruiz, along with Assemblymembers Verlina Reynolds-Jackson, Wayne P. DeAngelo, Anthony S. Verrelli, and Herb Conaway Jr.

Senator Shirley Turner commented on the broader implications of medical debt: "By prohibiting the reporting of certain types of medical debt to credit bureaus, we can give people a better chance at achieving financial stability." Senate Majority Leader M. Teresa Ruiz noted that Essex County has one of the highest rates of medical debt in New Jersey.

Assemblywoman Verlina Reynolds-Jackson expressed hope that this law would ease financial burdens during difficult times for many families in New Jersey. Assemblyman Anthony Verrelli pointed out how common medical debt is among collectors: “This bill will help protect patients from aggressive debt collection practices so they can focus on what matters most – healing and moving on.”

Several organizations have voiced their support for this legislative measure. Laura Waddell from New Jersey Citizen Action called it "a game-changer" for consumers facing financial hardships due to medical expenses. Renée Steinhagen from New Jersey Appleseed Public Interest Law Center emphasized its impact on preventing credit damage due to illness-related debts.

The signing ceremony included remarks from various advocates who stressed how crucial these protections are in ensuring healthcare access without compromising financial security.