77K in NJ will have med debt erased
State nonprofit to sue federal money to pay off $120M to Atlantic Health
By: Scott Fallon
NorthJersey.com
USA Today Network - New Jersey
..... About 77,000 patients with unpaid bills at one of New Jersey;s largest hospital systems will see almost all of their debt erased under a plan announced Tuesday [10/16/2024] by Governor Phil Murphy.
.....
Murphy and a national nonprofit group used $900,000 in federal tax dollars to pay off $120 million in medical debt to Atlantic Heath System, which operates seven hospitals across the state, including its flagship Morristown Medical Center. It is the second major medical debt payoff in two months.
..... The move "protects residents form accumulating debt and eliminate existing debt so the New Jerseyans can focus on what matters most: their health," Murphy said in a statement.
..... Representative for Atlantic Health did not immediately respond to questions on Tuesday [10/15/2024] morning.
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Because medical debt is often enormous and very hard to collect, some providers will sell the debt for pennies on the dollar.
..... Undue, a New York-based nonprofit group, negotiates deals with hospital systems nationwide. it buys large quantities of medical debt that often belongs to those least able to pay, and erases the debt.
..... Murphy made it a priority this year [2024] to tackle medical debt, saying it can cripple a family;s finances and prevent low-and-middle-class residents from being able to move up the social ladder.
..... At January's [2024] State of the State address, Murphy said he would set aside $10 million from the American Rescue Plan fund - the $1.9 trillion federal pandemic stimulus bill passed by Congress in 2021 - to pay off these bills.
..... Murphy has already spent almost $1.5 million, including $550,000 in August [2024] t6aht wiped away about $100 million in unpaid bills for 50,000 patients of Prime Healthcare.
..... The national for-profit chain runs five hospitals in North Jersey, including St. Mary's General in Passaic and St. Clair's in Denville and Dover.
..... Those who qualify have debts that equal 5% or more of their annual income or they have incomes not higher than four times the federal poverty level, which would be about $60,000 this year for an individual.
..... The payments this time focus only on patients with unpaid bills from Atlantic Health. In addition to Morristown, Atlantic Health operates Chilton Medical Center in Pompton Plains, Newton Medical Center, Overlook Medical Center in Summit, CentraState Medical Center in Freehold and more.
..... This is no application process. Those whose debt is reduced or canceled will receive a letter from undue in the mail beginning Thursday. [10/17/2024]
..... New Jersey's health care industry has explored in recent decades as one-time community hospitals have expanded into large, diversified research medical centers with the mission of keeping New Jerseyans from seeking care in New York City and Philadelphia.
..... But that ambition comes with a price. New Jersey has some of the highest health care costs in the nation, ranking 11th, with the average resident paying more than $11,000 a year. It also has some of the highest hospital costs, with admitted patients racking up an average of $3,157 in expenses each day.
..... Even though the state ranks on per capita income and only 6.8% of residents were uninsured in 2022, about 11% of New Jerseyans have medical debt that has gone to a collections bureau. About 11% of minori6ties were uninsured and 16% had medical debt in collections, according to the nonprofit Urban Institute.