‘This is just ridiculous’: An unpaid 5-cent bill ended one woman’s health plan

The plan, purchased through the federal government’s health insurance marketplace operating under the Affordable Care Act (ACA) — initially subsidized her premium, which covered the cost of previous scans and appointments (2) .

But then Hill started receiving bills: doctor visits ranging from $200 to $300 and an MRI for nearly $3,000. When she investigated further, she discovered that her insurance had been cancelled for “non-payment of premiums.”

That’s because her monthly premium went up from $0 to $0.01. Over the following months, her unpaid premiums had accumulated to $0.05. Her insurance was then cancelled, triggering retroactive medical bills.

A growing problem

Hill’s situation isn’t uncommon. About 81,000 subsidized ACA policies were terminated in 2023 for outstanding debts of $5 or less, according to KFF Health News, and nearly 103,000 more were cancelled for debts of less than $10.

Certain life events can trigger a recalculation of a person’s health insurance premium, such as getting married, changing jobs or a child turning 26 and no longer qualifying for coverage under a parent’s insurance. In Hill’s case, it was because she removed her mother from the family plan after her mother turned 65 and became eligible for Medicare.

Though Hill did receive notification of the change, she thought the one-cent difference was a rounding error. Plus, she says her insurance broker told her the plan was still active.

“Stepping back from what’s legal, this is just ridiculous,” Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University, told KFF Health News.

One factor leading to these “ridiculous” situations is the automation of health billing systems, which flag unpaid premiums (even if they’re only one cent).

The impacts can be severe. It can leave policyholders without coverage — and retroactive medical bills they thought were covered. If those bills are left unpaid, they could be sent to a collection agency, damaging the policyholder’s credit score.

While unpaid medical debt under $500 won’t impact your credit score, larger unpaid bills could (3).

How to fight back

Previously, insurers were allowed to ignore delinquencies of less than $10 and keep coverage active. But, as of Aug. 25, 2025, these protections were removed under the Trump administration as part of a broad sweep to purportedly tackle fraud (4).

Policyholders have a three-month grace period to get caught up — so long as you have a Marketplace plan, use the premium tax credit and have already paid at least one full month’s premium during the benefit period.

If you don’t pay by the end of the grace period, you lose your coverage. And if coverage is cancelled after the grace period, you could still be held liable for medical bills incurred during that time.

It also means you can’t qualify to enroll in another plan and will have to wait for the next Open Enrollment Period — which could leave you without coverage in the meantime (5).

If this happens to you, you have the right to appeal the decision to cancel your coverage. There are two ways to do this: an internal appeal (the insurance company will conduct a full review of its decision) and an external review (an independent third party will review the decision).

Some states have an external review process; if not, the appeal will be overseen by the federal government’s Department of Health and Human Services (HHS) (6).

Hill, for example, filed a complaint with HealthFirst and Florida’s Department of Financial Services. According to KFF Health News, she stated in her complaint that “all major insurers and payment processors in Florida follow a 1-cent write-off policy.”

From there, the case follows the appeals process (Hill’s balance for medical services in 2025 has since been adjusted to $0) (1).