Last summer, Lorena Alvarado Hill received a series of unexpected medical bills.
Hill, a teacher’s aide in Melbourne, Florida, is a single mother who works shifts at J.Crew on weekends so she can send her daughter to college. Hill’s mother, who lives with her, had an insurance plan through Health First.
Hill had not previously paid any premiums for the government-subsidized plan that covered her tests and other appointments.
Then the bill came.
In addition to the $2,966.93 MRI, Hill was required to pay for more than six doctor’s visits, each costing about $200 or $300. Hill said she didn’t have that kind of money on hand, so she put some bills on a payment plan and tried to figure out what went wrong.
To her surprise, she discovered that her insurance had been terminated for “non-payment of premiums.”
medical services
Health insurance plans purchased through the Affordable Care Act Federal Exchange, healthcare.gov.
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The monthly premium bill was 1 cent and increased in stages to 5 cents the following months.
Billing Issues: Small Claims, Big Consequences
ACA plans’ premium subsidies are automatically recalculated whenever coverage changes due to life events such as marriage, job change, or a child turning 26. In June, Hill removed her mother from the family’s group plan after she turned 65 and became eligible for Medicare and Medicaid.
As a result of this change, Mr. Hill’s monthly premium contribution was recalculated and increased from $0 to 1 cent. She said she thought the amount was too small to pay by credit card.
Hill admitted that she received a bill stating that she “has not paid her monthly health insurance premium and may lose health insurance coverage.”
But she said her doctor collected her regular copay at subsequent visits, and her insurance broker told her not to worry and reassured her that the plan “works.” Hill said he thought the 1 cent monthly premium was probably a rounding error that would not lead to cancellation.
On Nov. 22, she received a letter that read, “Important: Your health insurance coverage will be terminated.” The last day of reporting was supposed to be July 31, almost four months ago.
“I panicked,” Hill said. “I couldn’t sleep that night.”
She made an appointment with her broker the next day, who called Health First for clarification. The worse news was that not only would her insurance be terminated, but a 5-cent bill could be sent to a collection agency.
Hill is taking out loans to pay for her daughter’s college costs. “You can’t discredit me,” she said.
Sabrina Corlett, co-director of Georgetown University’s Center on Health Insurance Reform, said some people have lost insurance because of small debts. “With enhanced subsidies, this woman’s situation is not so unusual,” she says.
The American Rescue Plan, passed in 2021, increased the amount of government aid available to ACA plan holders. Those enhanced subsidies, which Congress allowed to expire late last year, meant low-income enrollees would have to pay little or no premiums.
The Biden administration revealed that approximately 81,000 subsidized ACA insurance policies were terminated in 2023 because enrollees owed less than $5. Nearly 103,000 more were canceled for unpaid amounts of less than $10.
To prevent this kind of loss of coverage, which is more likely to hit people with lower incomes, health officials in the Biden administration gave insurers the flexibility to keep coverage if ACA enrollees owe less than $10 in premiums, or 95% of their premiums.
Insurers were required to keep policies in effect for a 90-day “grace period” to give policyholders time to respond. That’s why Hill’s doctors initially accepted her co-pay and didn’t send her a bill, as if nothing had changed.
The Biden administration’s “flexibility” provisions went into effect on January 15, 2025, but not all insurance companies extended leniency to small debtors.
The Trump administration repealed that rule on August 25, completely eliminating the protections in the name of combating fraud and abuse.
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Alarmed by cancellations, thousands of dollars in bills, and the threat of collections exceeding 5 cents, Hill fought back by researching insurance laws.
She filed a complaint with Health First and the Florida Department of Financial Services in December, seeking cancellation of the 5-cent balance and retroactive reinstatement of the policy, citing state and federal laws that appear to apply to her situation.
Specifically, it said, “For credit card balances of $1.00 or less, creditors do not have to collect and consumers do not have to pay,” adding that “all major insurance companies and payment processors in Florida follow a penny write-off policy.”
She noted that HealthFirst’s policy is to respond to complaints within 30 days.
Thirty days have passed and Hill said she hasn’t heard back, and new bills keep coming from the canceled insurance.
Despite her frustration, Hill said she re-registered in 2026 because all of her doctors had contracts with HealthFirst.
HealthFirst spokesman Lance Skelly initially said the matter was “still in the appeals and grievance process.” He said in a follow-up email that HealthFirst canceled Hill’s policy in accordance with the law.
“It’s just ridiculous to back away from something that’s legal,” Corlett said.
A few weeks after reporters asked her insurance company, Hill said she checked her billing statement for all medical services she received in 2025 and was pleased to see that her outstanding balance had been adjusted to $0.
But she also said she wants HealthFirst to cover the amount owed on bills she pays and has put into a payment plan.
takeout
Even small claims can have serious consequences.
As medical billing decisions become automated, unreasonable outcomes are becoming increasingly common.
“A penny?!” Hill said. “A human would never do something like this!”
Although it may be tempting to ignore small debt notices, it’s important to take them seriously. Contact your insurance company and get a human involved.
Additionally, insurance policies have a grace period that allows coverage to continue even if you miss a payment, but some policies are not that long. Subsidized ACA Marketplace plans have a duration of 90 days, while other plans are only 30 or 45 days.
If you miss one payment, you could lose your coverage. Therefore, it is important to closely monitor your insurance premiums to ensure they are paid.
“This Month’s Bill” is a crowdsourced survey. KFF Health News and The Washington Post’s Well+Being A detailed explanation of medical expenses. Since 2018, this series has helped countless patients and readers reduce their healthcare costs and has been cited at statehouses, on Capitol Hill, and in the White House. Do you have a confusing or exorbitant medical bill that you would like to share? please tell me about it!
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