Elisabeth Rosenthal
Last summer season, Lorena Alvarado Hill acquired a collection of sudden medical payments.
A instructor’s aide in Melbourne, Florida, Hill is a single mother who works shifts at J.Crew on the weekends to ship her daughter to varsity. Hill and her mom, who lives together with her, had been enrolled in an insurance coverage plan by HealthFirst.
Hill paid nothing towards the premiums for the government-subsidized plan, which beforehand had lined her scans and different appointments.
Then the payments got here.
Hill was on the hook for a $2,966.93 MRI, in addition to greater than half a dozen physician visits costing about $200 or $300 every. Without that type of cash available, Hill mentioned, she put a number of of the payments on cost plans and tried to determine what had gone unsuitable.
She found, to her shock, that her insurance coverage had been canceled for “non-payment of premiums.”
The Medical Service
A medical health insurance plan bought by the Affordable Care Act federal alternate, healthcare.gov.
The Bill
A month-to-month premium invoice for 1 cent, which within the following months elevated incrementally to five cents.
The Billing Problem: Small Bill, Big Consequences
Premium subsidies for ACA plans are mechanically recalculated each time protection is modified due to a life occasion, akin to marriage, a change of job, or a child turning 26. In June, Hill eliminated her mom from the household’s group plan as a result of she turned 65 and have become eligible for Medicare and Medicaid.
The change triggered a recalculation of Hill’s month-to-month premium contribution, rising it from $0 to 1 cent. She mentioned she thought the quantity was so small that she couldn’t pay it together with her bank card.
Hill acknowledged she had acquired some payments that famous, “You may lose your health insurance coverage because you did not pay your monthly health insurance premium.”
But she mentioned that her docs collected the standard copayments throughout subsequent visits and that her insurance coverage dealer advised her to not fear, reassuring her that the plan was “active.” Hill figured the 1-cent month-to-month premium was most likely a rounding error that couldn’t lead to termination, she mentioned.
On Nov. 22, she obtained a letter marked “Important: Your health insurance coverage is ending.” It listed the final day of protection as July 31, almost 4 months earlier than.
“I panicked,” Hill mentioned. “I didn’t sleep that night.”
She made an appointment the subsequent day together with her dealer, who referred to as HealthFirst for clarification. The information was even worse: Not solely had her insurance coverage been canceled, however the 5-cent invoice may very well be despatched to a group company.
Hill takes out loans to pay her daughter’s school bills. “I couldn’t have my credit ruined,” she mentioned.
Others have misplaced their protection over owing small quantities, mentioned Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University. “This woman’s situation is not so unusual with the enhanced subsidies,” she mentioned.
The American Rescue Plan, handed in 2021, elevated the quantity of presidency help obtainable to ACA plan holders. Those enhanced subsidies, which Congress let expire on the finish of final 12 months, meant enrollees with decrease incomes needed to pay little or nothing towards their premiums.
The Biden administration discovered that, in 2023, about 81,000 sponsored ACA insurance coverage insurance policies have been terminated as a result of the enrollee owed $5 or much less. Nearly 103,000 extra have been canceled for owing lower than $10.
To forestall that type of protection loss, probably hitting individuals with little revenue, Biden administration well being officers gave insurers the flexibility to permit ACA enrollees to retain protection in the event that they owed lower than $10, or lower than 95% of premium prices.
Insurers have been required to maintain insurance coverage lively for a 90-day “grace period” to offer enrollees time to reply. That’s why Hill’s docs initially took her copayments and despatched no invoice, as if nothing had modified.
That Biden administration “flexibility” rule took impact Jan. 15, 2025, although not each insurer opted to supply leniency to these owing small quantities.
The Trump administration eliminated the rule on Aug. 25, eliminating the safety solely within the identify of combating fraud and abuse.
The Resolution
Alarmed by the cancellation, the 1000’s of {dollars} in payments, and the specter of collections over 5 cents, Hill researched insurance coverage regulation and fought again.
She filed a grievance in December with HealthFirst and the Florida Department of Financial Services asking for a write-off of her 5-cent steadiness and retroactive restoration of her coverage, citing state and federal legal guidelines that appeared to use to her state of affairs.
In specific, she wrote, “creditors are not required to collect, and consumers are not required to pay, credit-card balances of $1.00 or less,” including that “all major insurers and payment processors in Florida follow a 1-cent write-off policy.”
She famous that HealthFirst’s coverage was to answer complaints in 30 days.
Thirty days got here and went, however Hill mentioned she heard nothing in response — and new payments from her canceled coverage saved coming.
Despite her frustration, Hill mentioned, all her docs have been contracted with HealthFirst, so she reenrolled for 2026.
Lance Skelly, a spokesperson for HealthFirst, initially mentioned the case “is still in the appeals/grievance process.” In a follow-up e mail, he mentioned HealthFirst had followed the law in canceling Hill’s coverage.
“Stepping back from what’s legal, this is just ridiculous,” Corlette mentioned.
Weeks after a reporter’s question to the insurer, Hill mentioned she checked out her billing statements for all of the medical companies she acquired in 2025 and was pleasantly shocked that the balances owed had been adjusted to $0.
But she mentioned she would additionally like HealthFirst to cowl what she had paid and nonetheless owed towards the payments she’d placed on cost plans.
The Takeaway
Even small payments can have main penalties.
With the automation of extra well being billing choices, irrational outcomes have develop into more and more frequent.
“One cent?!” Hill mentioned. “No human would do this!”
It will be tempting to dismiss the discover of a tiny debt, however it’s necessary to take it severely. Contact the insurer and get a human concerned.
And whereas insurance coverage insurance policies have grace intervals permitting protection to stay in place should you miss a cost, some aren’t very lengthy. For sponsored ACA market plans, the interval is 90 days, however others final simply 30 or 45.
Missing one cost can imply shedding protection. So it’s necessary to maintain a detailed eye on premiums to ensure they’re paid.
Bill of the Month is a crowdsourced investigation by KFF Health News and The Washington Post’s Well+Being that dissects and explains medical payments. Since 2018, this collection has helped many sufferers and readers get their medical payments lowered, and it has been cited in statehouses, on the U.S. Capitol, and on the White House. Do you might have a complicated or outrageous medical invoice you wish to share? Tell us about it!
