New Jersey announced the ninth and final round of automatic medical debt cancellation on September 17, 2026, erasing $90 million owed by nearly 20,000 residents. The state partnered with Undue Medical Debt, a national nonprofit that purchases unpaid medical bills from healthcare providers and cancels them rather than collecting from patients. Unlike most relief programs, eligibility is automatic and participation requires no action. Affected residents simply received notification letters in the mail the week of September 17, and the debt was cancelled.
Table of Contents
- Who Qualifies for Automatic Cancellation
- What Recipients Must Do
- What Medical Debt Qualifies
- The Program's Total Impact
- Frequently Asked Questions
Who Qualifies for Automatic Cancellation
Eligibility is automatic for New Jersey residents earning at or below 400% of the federal poverty line OR carrying medical debt equal to 5% or more of annual income. No application is required because the state determines eligibility based on data from providers who sold qualifying debts to Undue Medical Debt. If your situation matches these criteria, you are notified and the debt is cancelled; if not, this round does not apply to you.
The dual threshold covers two different populations: those with moderate incomes and those with substantial medical bills regardless of income. Together, these criteria encompassed roughly 20,000 New Jersey residents in this final round.
What Recipients Must Do
Affected residents received notification letters the week of September 17 and were not required to take any action to receive the cancellation. Once the debt is purchased and cancelled by Undue Medical Debt and the state, it no longer exists legally. No response is necessary, no form needs to be filed, and no follow-up is required from you. If you believe you should have been included but did not receive notification, contact the new Jersey Department of Health to verify your status.
What Medical Debt Qualifies
This program covers only medical debts already purchased by Undue Medical Debt from healthcare providers; unpaid bills still held by hospitals and healthcare systems are not affected. If a collection agency acquired your debt, the program may have covered it. If your original healthcare provider still holds your account, this program cannot help. This distinction is critical: newly accumulated medical bills, debts still held by providers, and debts consolidated or sold after Undue Medical Debt's purchases do not qualify.
The Program's Total Impact
Since launching in 2023, New Jersey's medical debt relief program has now cancelled more than $1.6 billion across nine rounds, benefiting nearly 900,000 residents. This ninth and final round concludes the state's debt cancellation efforts; no additional rounds are planned. The program was funded through state appropriations and one-time federal dollars from the American Rescue Plan.
For residents whose debts were cancelled, the relief is permanent. A cancelled medical debt cannot be resold to another collector or pursued through legal action.
Frequently Asked Questions
What if I did not receive a notification letter?
The cancellation is already complete if your debt was included. Contact the New Jersey Department of Health to verify whether your debt was part of this round. Receiving the letter is not required for the cancellation to take effect.
Does this cover all of my medical debt?
Only debts that Undue Medical Debt has already purchased from providers. Bills still owned by your original healthcare provider are not included in this program.