New Jersey’s second round of medical debt relief wipes out $120M for tens of thousands of residents

SOUTH JERSEY (KYW Newsradio) — New Jersey Gov. Phil Murphy has announced another round of medical debt relief, once again wiping out past-due medical bills for tens of thousands of people.

In this round of relief, the state purchased $120 million worth of medical debt with about $900,000 in federal funding.

This is the second debt relief effort in the last couple of months. In August , New Jersey spent $550,000 to wipe out $100 million of medical balances. More than 125,000 families are benefiting from these two purchases.

The state works with Undue Medical Debt, a debt purchaser, which buys bundles of debt from hospital systems. Instead of trying to collect, the firm forgives the debts.

In a post on X , Murphy said health care needs an overhaul, but short of that, this is the next best thing.

“This is a pretty crazy opportunity to give relief to folks that are being crushed right now,” he said in a video. “We don’t like the system, but as long as this is the system, let’s maximize our hand in retiring medical debt for pennies on the dollar.”

Murphy said the state will continue looking for similar opportunities.

Those who qualify are either four times or below the federal poverty level or have medical debts that equal 5% or more of their annual income. Those benefiting from this round of medical debt relief will be notified by mail beginning Thursday, Oct. 17.