One Year After Medical Debt Law, New Jersey Expands Protections for Residents

Newark, New Jersey – New Jerseyans now have stronger rights when facing medical debt as all the requirements under the Louisa Carman Medical Debt Relief Act are in effect. Marking the one-year anniversary of the Act, the final provisions now in force include:

The Louisa Carman Medical Debt Relief Act was signed into law on July 22, 2024, to protect New Jerseyans from the devastating effects of involuntary medical debt and address some aggressive debt collection practices. Upon enactment, medical debt covered under the law could no longer be reported to credit agencies, and any violations were voided.  A measure that is likely to increase credit scores by 20 points for those impacted by the law.

At the time of the law’s enactment, there were 1.5 million NJ residents struggling with medical debt. Additional residents may be at risk as New Jersey braces for the fallout from recent federal healthcare funding cuts and new policies.

To prepare and in response to the growing need for medical debt education, NJ for Health Care Coalition, NJ Appleseed Public Interest Law Center, and New Jersey Citizen Action have partnered to launch EndMedDebtNJ.org, a new online hub to help residents understand their rights, manage medical debt disputes, insurance appeals, and payment negotiations. The site offers resources in both English and Spanish and since its soft launch earlier this month, EndMedDebtNJ.org has served nearly 1,000 visitors seeking help.

“Over the course of my Administration, we have worked diligently to build a health care system that is more affordable and more accessible for families across New Jersey. This includes taking steps to prevent our residents from falling into crushing medical debt by meaningfully lowering the cost of health coverage and investing in a nation-leading initiative to abolish $1.1 billion and counting in medical debt for over 776,000 New Jerseyans. A hallmark of this effort is the Louisa Carman Medical Debt Relief Act – a sweeping measure to ensure families in our state can access the care they need without facing the risk of financial calamity,” said Governor Phil Murphy. “These critical protections help to safeguard New Jerseyans from falling into medical debt, which, as many know, can accumulate quickly and follow a person for decades, preventing them from reengaging with the health care system even when medical services are desperately needed. I am immensely proud to mark this milestone and honor Louisa’s mission for change, and I thank New Jersey Citizen Action and NJ Appleseed for their partnership in transforming our health care system for the better.”

“Protecting New Jersey consumers against unfair and abusive debt collection practices is never more important than when it involves medical debt in the wake of a health crisis,” said Elizabeth M. Harris, Acting Director of the Division of Consumer Affairs. “Thanks to the protections established under the Louisa Carman Medical Debt Relief Act, New Jerseyans no longer have to fear that crippling medical expenses will undermine their financial stability.”

“We applaud Governor Murphy’s strong and comprehensive commitment to tackling the crisis of medical debt in New Jersey. His administration has taken decisive, ongoing action to both relieve the crushing burden of existing debt and to strengthen critical protections for patients and health care consumers. Today marks a powerful milestone: for the past year, New Jerseyans have been shielded from the devastating impact of new medical debt appearing on their credit reports. Tomorrow, they will gain even greater protections — including a cap on predatory interest rates and a prohibition on wage garnishment due to medical debt,” said New Jersey Citizen Action’s Healthcare Program Director, Laura Waddell. “These reforms are not only urgently needed — they are deeply meaningful. They honor the memory of Louisa by helping to ensure that no one in our state has to suffer financial ruin simply because they got sick or needed care. The progress made is significant, but there is more work to do. We must continue to pursue broader consumer education, proactive policies that prevent medical debt before it starts, and real solutions that make health care more affordable and accessible for everyone — long before debt collectors or the courts ever get involved. NJ Citizen Action remains fully committed to advancing this work. That’s why we are proud to stand today with our NJ for Health Care coalition partners for the launch of EndMedDebtNJ.org. Together, we will continue to build a healthier, fairer future for all.”

“With a federal court striking down the Consumer Financial Protection Bureau’s rule on medical debt credit reporting last week, New Jersey’s medical debt credit reporting ban is an even more critical safeguard for consumers,” said Beverly Brown Ruggia, Financial Justice Program Director at New Jersey Citizen Action. “While it is deeply unfortunate that federal protections have been rolled back, the Louisa Carman Medical Debt Relief Act remains a powerful tool that shields most New Jerseyans from the devastating credit consequences of simply getting sick. The launch of endmeddebtnj.org is a vital next step forward as it gives residents a clear, accessible way to understand their rights under the state law and offers guidance through the often overwhelming and opaque process of medical debt collection. At a time when federal protections are under threat, resources like this are more essential than ever.”

“The Medical Billing & Debt toolkit, which includes a website (endmeddebtnj.org) and downloadable manual is a powerful new resource for the people of New Jersey,” said Renee Steinhagen, Executive Director of NJ Appleseed. “Whether you’re trying to understand a medical bill, avoid falling into debt, or respond to a collection lawsuit, this website provides clear, accessible tools to help residents protect their rights and navigate the complex world of medical costs and debt.”

“The EndMedDebtNJ website covers in detail the credit reporting ban, payment plan requirement and other consumer protections provided by the Louisa Carman law. The federal administration killed a federal rule that prohibited the reporting of medical debt to credit bureaus, but New Jerseyans need to know that they are still protected under our state law,” said Mary Pat Gallagher, Communications and Policy Analyst at NJ Appleseed. “Not only can medical debt not be reported in New Jersey, but the law has real teeth in that any debt or part of a debt that is reported automatically becomes void, and no one has any legal right to collect it. No other state has a similar law that erases the debt if the reporting ban is violated. “

“Fostering an understanding among New Jersey residents about the law and legal system is central to the New Jersey State Bar Foundation,” said its President Ralph J. Lamparello. “Navigating legal issues in the face of a medical emergency is a daunting task and we hope this publication will help ease that challenge.”

“One year ago, Governor Murphy signed the Louisa Carman Medical Debt Relief Act, delivering long-overdue support to patients facing the dual hardship of serious illness and the crushing weight of medical debt,” said Quinton Law, government relations director for the American Cancer Society Cancer Action Network in New Jersey. “New Jersey took a critical step toward easing the financial fallout that often follows a diagnosis, giving patients the chance to focus on healing rather than enduring years of financial pressure. At a time when concerns over cost-of-living remain high across the state, this legislation was a meaningful move toward reducing the financial toll of medical debt. We must keep this momentum going, leveraging tools like the EndMedDebtNJ.org and taking further action to prevent patients from incurring medical debt.”

“Some time ago, I fell while leaving work and injured my wrist, which ultimately required surgery. At the time, my employer-sponsored insurance hadn’t yet taken effect, so I was left to shoulder the full cost of care on my own. That experience left me with over $70,000 in medical debt. It has deeply affected my life and continues to haunt both my credit and my day-to-day stability. Knowing that there are now protections in place for people like me, and that there’s an online resource where I can find tools, information, and support to better understand my rights and the debt collection process, has given me a real sense of relief. These resources bring peace of mind and make a real difference when you’re facing something as overwhelming as medical debt,” said Colleen H.* from Belleville, NJ.

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