New Jersey has forgiven more than $86 million in medical debt for more than 53,000 residents, marking the sixth round of relief under the state’s partnership with national nonprofit Undue Medical Debt.
Six things to know:
1. The state used about $600,000 in American Rescue Plan funds to facilitate the latest debt purchase, which Undue completed through participating providers. Undue-branded letters notifying affected residents began arriving Dec. 27, according to a Jan. 2 news release from Gov. Phil Murphy’s office.
2. With this round included, the state has now erased nearly $1.4 billion in medical debt for more than 828,000 residents.
3. To qualify, individuals must earn at or below 400% of the federal poverty level or hold medical debt totaling at least 5% of their annual income. There is no application process; debt is purchased in bulk and forgiven for eligible residents.
4. New Jersey is among the few states to both fund direct medical debt relief and ban most medical debt from appearing on credit reports. More than 3 in 4 voters support policies protecting consumers from medical debt, according to recent polling cited by the governor’s office.
5. Arizona has also partnered with Undue Medical Debt, eliminating $642 million in medical debt for 485,000 residents as of December.
6. The debt purchases come as legislators in several states are advancing medical debt protections, while the Consumer Financial Protection Bureau maintains that states cannot regulate consumer credit reports.
