Last summer, Lorena Alvarado Hill received a series of unexpected medical bills.
Hill, a teacher’s assistant in Melbourne, Florida, is a single mother who works shifts at J.Crew on weekends to send her daughter to college. Hill and her mother, who lives with her, were enrolled in an insurance plan through HealthFirst.
Hill paid nothing for premiums for the government-subsidized plan, which previously covered her scans and other appointments.
Then the bills arrived.
Hill had to pay for a $2,966.93 MRI, as well as more than half a dozen doctor visits that cost about $200 or $300 each. Without that amount of money available, Hill said, he put some of the bills on payment plans and tried to figure out what had gone wrong.
He discovered, to his surprise, that his insurance had been canceled for “nonpayment of premiums.”
The medical service
A health insurance plan purchased through the federal Affordable Care Act exchange, Healthcare.gov.
the bill
A monthly premium bill of 1 cent, which in the following months gradually increased to 5 cents.
The billing problem: small bill, big consequences
Premium subsidies for ACA plans are automatically recalculated whenever coverage changes due to a life event, such as a marriage, job change, or a child turning 26. In June, Hill removed her mother from the family group plan because she turned 65 and became eligible for Medicare and Medicaid.
The change prompted a recalculation of Hill’s monthly premium contribution, increasing it from $0 to 1 cent. He said he thought the amount was so small he couldn’t pay it with his credit card.
Hill acknowledged that he had received some bills that said, “You may lose your health insurance coverage because you did not pay your monthly health insurance premium.”
But he said his doctors charged the usual copays during subsequent visits and that his insurance broker told him not to worry, assuring him that the plan was “active.” Hill thought the 1-cent monthly bonus was probably a rounding error that couldn’t result in termination, he said.
On November 22, you received a letter that said “Important: Your health insurance coverage is ending.” It listed the last day of coverage as July 31, nearly four months earlier.
“I panicked,” Hill said. “I didn’t sleep that night.”
He made an appointment the next day with his agent, who called HealthFirst for clarification. The news was even worse: Not only had his insurance been canceled, but the 5-cent bill could be sent to a collection agency.
Hill takes out loans to pay for her daughter’s college expenses. “I couldn’t ruin my credit,” he said.
Others have lost coverage because they owed small amounts, said Sabrina Corlette, co-director of the Center on Health Insurance Reform at Georgetown University. “This woman’s situation is not that unusual with the increase in subsidies,” he said.
The American Rescue Plan, passed in 2021, increased the amount of government assistance available to ACA plan holders. Those enhanced subsidies, which Congress let expire late last year, meant that lower-income enrollees had to pay little or nothing for their premiums.
The Biden administration found that in 2023, about 81,000 ACA subsidized insurance policies were canceled because the enrollee owed $5 or less. Nearly 103,000 more were canceled for owing less than $10.
To avoid that kind of coverage loss, which is likely to affect low-income people, Biden administration health officials gave insurers the flexibility to let ACA enrollees keep coverage if they owed less than $10, or less than 95% of premium costs.
Insurers were required to keep insurance active for a 90-day “grace period” to give enrollees time to respond. That’s why Hill’s doctors initially took his co-pays and didn’t send him any bills, as if nothing had changed.
That “flexibility” rule from the Biden administration went into effect on January 15, 2025, although not all insurers chose to offer forbearance to those who owe small amounts.
The Trump administration eliminated the rule on August 25, completely eliminating the protection in the name of fighting fraud and abuse.
The resolution
Alarmed by the cancellation, thousands of dollars in bills and the threat of charges of more than 5 cents, Hill investigated insurance law and fought back.
In December, she filed a complaint with HealthFirst and the Florida Department of Financial Services requesting a write-off of her 5-cent balance and retroactive reinstatement of her policy, citing state and federal laws that appeared to apply to her situation.
In particular, he wrote, “creditors are not required to collect, and consumers are not required to pay, credit card balances of $1.00 or less,” adding that “all major insurers and payment processors in Florida follow a 1-cent cancellation policy.”
He noted that HealthFirst’s policy was to respond to complaints within 30 days.
Thirty days passed, but Hill said he heard no response and new bills continued to arrive for his canceled policy.
Despite his frustration, Hill said, all of his doctors were contracted with HealthFirst, so he re-enrolled for 2026.
Lance Skelly, a HealthFirst spokesman, initially said the case “is still in the appeals/complaints process.” In a follow-up email, he said HealthFirst had followed the law in canceling Hill’s policy.
“Going away from what is legal, this is just ridiculous,” Corlette said.
Weeks after a reporter’s inquiry to the insurer, Hill said he looked at his statements for all the medical services he received in 2025 and was pleasantly surprised that the balances owed had been adjusted to $0.
But he said he would also like HealthFirst to cover what he had paid and still owed on bills he had included in payment plans.
The takeaway
Even small bills can have major consequences.
With more healthcare billing decisions being automated, irrational outcomes have become increasingly common.
“A penny?!” Hill said. “No human would do this!”
It may be tempting to ignore the notice of a small debt, but it’s important to take it seriously. Contact the insurer and involve a human.
And while insurance policies have grace periods that allow coverage to remain in effect if you miss a payment, some are not very long. For subsidized ACA marketplace plans, the period is 90 days, but others last only 30 or 45.
Missing a payment could mean losing coverage. That’s why it’s important to keep a close eye on premiums to make sure they’re paid.
Bill of the Month is a collaborative research conducted by KFF Health News and Wellbeing+from the Washington Post that analyzes and explains medical bills. Since 2018, this series has helped many patients and readers reduce their medical bills and has been cited in statehouses, the U.S. Capitol, and the White House. Do you have a confusing or scandalous medical bill you want to share? Tell us about this!
