Medical debt may be cut for 50K in NJ
Middle- to lower-income residents eyed
By: Scott Fallon
NorthJersey.com
USA Today Network - New Jersey
..... Nearly 50,000 New Jerseyans will see some or all of their medical debt paid off under a plan funded by federal tax dollars, Governor Phil Murphy announced Tuesday. [08/20/2024]
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The plan affects 17,905 patients who owe $61.5 million to the for-profit chain Prime Healthcare, which operates five hospitals in North Jersey. another $38.4 million that has already gone to collection agencies will be erased, affecting 31,738 residents.
..... The announcement is part of an effort to reduce medical bills in a state with some of the highest health care costs in the nation. Almost 1 million New Jerseyans have unpaid medical bills that have gone debt collectors.
..... "New Jerseyans should not have to scrimp and save to ensure their basic health care needs are net, or to pay down lofty medical debts resulting from tragic accidents or devastating diagnoses," Murphy said in a statement.
..... Medial debt relief targets mostly middle- to lower-income residents or those who owe considerable sums.
..... 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 [2024] for an individual.
..... It also directly affects many Prime Healthcare patients. The nationwide chain has taken over several distressed New Jersey hospitals in the past decade. They are:
* St Mary's General Hospital, Passaic
* Saint Clares' Denville Hospital Boonton
*
Saint Clare's Dover Hospital
* Saint Michael's Medical Center, Newark
..... The Murphy administration partnered with Undue Medical Debt, a national nonprofit group that helps lower or eliminate medical debt.
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Because medical debt is so mousses and often goes unpaid, it is under a penny a dollar.
.... Undue used $550,000 from a portion of New Jersey's American Rescuer plan fund - the $1.9 trillion pandemic stimulus bill passed in 2021 - to buy $100 million of debt. that amounts to just 0.6% of the total. There is no application process. Letters began going out Monday [08/19/2024] from Undue to those who are having their debt lowered or erased.
..... Undue is in talks with other New Jersey hospital networks and collection agencies to buy and erase debt, said Danial Lempert, a spokesman for the group. There is more taxpayer money budgeted for the effort. Murphy said in his State of the State address in January [2024] that he would use $10 million from the federal rescue plan to buy and erase medical debt.
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Despite ranking high in per capita income, about 11% of New Jerseyans have medial debt that has gone to a collections bureau despite only 6.8% of residents being uninsured in 2022. About 11% of minorities were uninsured and 15^ had medical debt in collections, according to the nonprofit Urban Institute.
..... New Jersey has some of the highest health care costs in the nations with the average resident paying more than $11,000 a year, ranking it 11th. It also has some of the highest hospital costs, with admitted patients racking up an average of $3,157 in expenses each day.
..... A 2022 report by the University of Arizona and University of Utah showed that New Jersey has one of the nation's worst medical debt protection policies, ranking it 45th among states.
..... Patients who acquire medical debt are less likely to seek care in the future for fear of economic ruin. "We hope the tens of thousands of recipients in this first wave of medical debt relief are encouraged to re-engage with the health care system and feel both financial and emotional relief,' said Allison Sesso, CEO of Undue.