New Jersey residents are receiving a major reprieve from the crushing burden of medical debt as the state announces the sixth round of its Medical Debt Relief Initiative. Governor Phil Murphy unveiled the latest action on January 2, 2026, confirming that more than $86 million in medical debt has been erased for over 53,000 individuals through the ongoing partnership with the national nonprofit organization, Undue Medical Debt. This milestone brings New Jersey closer to nearly $1.4 billion in total medical debt forgiven for more than 828,000 residents statewide, reflecting the state’s sustained commitment to easing healthcare costs for its citizens.
Funded with approximately $600,000 in American Rescue Plan Act dollars, the initiative allows Undue to acquire qualifying medical debt directly from healthcare providers and secondary market partners and cancel it entirely. Residents affected by the program began receiving Undue-branded notification letters in late December 2025, and no action is required to claim the relief.
The effort builds on the framework established by the Louisa Carman Medical Debt Relief Act, signed into law by Governor Murphy in July 2204, which formalized the state’s authority to address medical debt on a systemic scale. “With nearly $1.4 billion in medical debt abolished for hundreds of thousands of New Jersey residents, we are making a real, tangible impact and alleviating the burden of unpayable medical bills,” Murphy said. “Nobody should have to delay life-saving care because they fear the crushing burden of medical debt or cut corners to ensure their basic health care needs are met.”
Allison Sesso, CEO and President of Undue Medical Debt, emphasized the significance of the initiative at a time when the national medical debt crisis is worsening. “New Jersey stands as a national leader — not only providing direct relief, but also enacting critical protections like prohibiting medical debt from appearing on credit reports,” Sesso said. “No one chooses to get sick, be in an accident, or manage a chronic illness, and we’re proud that tens of thousands of families will soon receive this welcome news in the mail.”
The program has notable implications for public health, as Acting Health Commissioner Jeff Brown highlighted. “Research consistently shows that medical debt drives people to forgo or delay care,” Brown noted. “When families aren’t weighed down by past medical bills, they’re more likely to schedule screenings, keep doctor’s appointments, and address health issues before they become crises. Every dollar the state invests in eliminating medical debt is an investment in better health for the Garden State.”
Relief through the program is automatic for eligible residents, with no application necessary. Undue purchases bundled portfolios of past-due medical debt for a fraction of their value and cancels them rather than pursuing collection. Eligibility is based on income and debt burden, including residents at or below 400% of the federal poverty level or those whose medical debt represents at least 5% of their annual income.
By addressing medical debt at scale, New Jersey is not only providing immediate financial relief but also supporting long-term health outcomes for tens of thousands of families. The initiative illustrates a model for how state-level intervention can directly remove barriers to care while fostering a more equitable healthcare environment. For further context on health and wellness initiatives across the state, readers can explore the full scope of programs through the state’s health and wellness resources.
The New Jersey Medical Debt Relief Initiative continues to reinforce the state’s position as a national leader in healthcare innovation, ensuring that medical debt does not prevent residents from accessing necessary care and maintaining financial stability.
