New Jersey canceling $100M in medical debt

New Jersey Gov. Phil Murphy (D) announced Wednesday the state would cancel $100 million in medical debt for nearly 50,000 residents.

“Medical debt can follow someone for decades. We are wiping the slate clean for thousands and making a real impact on their lives,” Murphy posted on the social platform X.

New Jersey is working with the nonprofit Undue Medical Debt, which said in a release it is working with the state to leverage more than $550,000 in American Rescue Plan federal funds.

Nearly 18,000 New Jersey residents owned $61.6 million to Prime Healthcare hospitals, and more than 31,000 people owed more than $38.4 million to other providers like collections agencies, according to the nonprofit.

“When someone is sick or injured, they should be able to focus on what matters most — getting better — rather than worrying about how they will pay for the life-saving care and services rendered to them,” Murphy said in a statement.

Murphy last month signed the Louisa Carman Medical Debt Relief Act, which safeguards residents from accumulating more medical debt and protects them from “predatory medical debt collectors.”

Undue Medical Debt said there is no application process for the debt relief. The nonprofit will work with hospitals across the country to purchase past-due medical debt.

People who qualify for Undue’s medical debt relief are four times or below the federal poverty level or have medical debt that equal 5 percent or more of their annual income, the nonprofit said in its release.

The announcement follows a pledge from Democratic presidential nominee Vice President Harris to remove all medical debt from credit scoring.

Harris has sought to take the health care accomplishments made by the Biden administration a step further.