New Jersey Just Wiped Out $90 Million In Medical Debt For 20,000 Residents

When New Jersey launched its medical debt abolishment program in 2023, it used the same model that Illinois deployed to such remarkable effect: partnering with nonprofit Undue Medical Debt to purchase qualifying debt from healthcare providers and collection agencies at pennies on the dollar, then instead of collecting, simply sending recipients a letter telling them the debt is gone. No action required, no strings attached, no taxes owed on the forgiven amount — just a letter and a number wiped from someone's life. The ninth and final round of the program, announced September 17, erased $90 million in debt for nearly 20,000 residents, bringing the total to over $1.6 billion eliminated for nearly 900,000 New Jerseyans since 2023. Funded through state investment and one-time federal American Rescue Plan funds that are now fully expended, this final round closes out one of the most effective public health financial interventions New Jersey has ever run.

To qualify, residents had to earn at or below 400 percent of the federal poverty line, or carry medical debt equal to at least 5 percent of their annual income, with relief delivered automatically and no application required. "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." Across nine rounds, the state effectively erased the medical debt of nearly one in ten New Jersey residents, with no action required from anyone who benefited except opening their mailbox.

Source:https://www.nj.gov/health/news/2026/approved/20260917a.shtml