New Jersey Gov. Phil Murphy forgives $100 million in medical debt, by Reuters

By Liya Cui

NEW YORK (Reuters) – Nearly 50,000 people in New Jersey will have $100 million in medical debt wiped out, Governor Phil Murphy said on Tuesday, in one of the largest cases of a state offering direct aid to people who don’t I can pay the medical bills.

Murphy allocated $550,000 in US federal bailout funds and partnered with Undue Medical Debt, a non-profit organization that buys unpaid medical bills from hospitals at a discount, to execute the one-time debt settlement.

New Jersey residents who qualify for aid began receiving letters Monday, according to a news release from the governor’s office.

“Medical debt accumulates very quickly and can follow a person for decades,” Murphy said in the release. “We’re clearing the foundation for thousands of New Jersey families, eliminating their debt, and making a real, tangible impact on their lives. “

Those who qualify for aid are at least four times below the federal poverty level or have medical debt equal to 5 percent or more of their annual income, according to the news release.

The relief will be given to 17,905 people who owed $61.6 million to Prime Healthcare hospitals and 31,748 people who owed about $38.4 million to collection agencies and other debt holders.

Undue has partnered with local governments to purchase hospital debt starting in 2022. Arizona, Indiana and New York City announced programs this year that could each eventually wipe out $1 billion to $2 billion in medical debt of dollars with the help of Undue.

Governments also drew funds from the American Rescue Plan, the $1.9 trillion coronavirus relief bill signed into law in 2021 to eliminate an estimated $7 billion in medical debt for nearly 3 million Americans, according to a July White House press release.

Some states are finding other ways to relieve their residents of burdensome medical bills, such as North Carolina, which received approval from the Biden administration last month to incentivize hospitals to forgive the debt of about 2 million residents in exchange for more Medicaid funds.