Canceled Health Insurance but Still Billed? Here’s Why
Many people are shocked to discover that canceling health insurance does not always stop the bill—especially when coverage comes from an ACA Marketplace or state exchange like Pennie, Healthcare.gov, or Covered California.
If you canceled your plan, switched jobs, or moved to employer coverage and were still billed for an entire month, you are not alone. A recent court case explains exactly why this happens—and why many appeals fail.
This article breaks it down in plain English, so you know what went wrong, what arguments usually fail, and what you should do next if you’re facing a similar situation.
The Real Case Behind This Issue
McGrody v. Pennsylvania Health Insurance Exchange Authority (Pennie)
What happened:
A consumer enrolled in ACA Marketplace coverage while her husband was unemployed
Her husband later got a job with health insurance starting October 1
On October 1, she called to cancel her Marketplace plan
She was still billed for the entire month of October
She argued she shouldn’t owe the bill because she canceled right away
She appealed after receiving a collections notice
The result: The court ruled against her and upheld the bill.
This outcome feels unfair—but it’s very common.
Why You Can Be Billed After Canceling Health Insurance
1. Health Insurance Is Billed by the Month — Not the Day
Marketplace health plans work on monthly coverage periods.
If coverage is active on the first day of the month, you generally owe:
The entire monthly premium
Even if you cancel later that same day
👉 Canceling on the 1st does not usually cancel the month.
2. Retroactive Cancellation Is Extremely Limited
Under federal ACA regulations, retroactive cancellation is only allowed in very specific situations, such as:
A system or technical error prevented cancellation
The plan was created due to exchange staff misconduct
You were enrolled without your knowledge or consent
In the McGrody case, none of these applied.
❌ Simply not being told about the billing consequence is not enough
❌ Not “using” the insurance is not enough
3. Not Every Issue Is Appealable
Many consumers assume:
“If I was billed unfairly, I can appeal.”
Unfortunately, ACA regulations limit appeals to specific decisions, such as:
Eligibility determinations
Subsidy calculations
Enrollment period rulings
Termination dates and monthly billing disputes are often not appealable issues at all.
That’s exactly why this appeal failed.
4. Deadlines Matter — A Lot
Marketplace appeals typically must be filed within 90 days of the decision being challenged.
In this case:
The bill arose in October 2021
The appeal wasn’t filed until 2023
The delay alone was enough to sink the case
⏱️ Waiting for a collections notice is often too late. Common Appeal Arguments That Fail (and Why)
Here are the arguments people frequently raise—and why courts reject them:
❌ “I didn’t use the insurance”
Coverage exists whether or not you see a doctor.
❌ “The representative didn’t explain it”
Courts generally hold consumers responsible for plan rules, even if a phone agent didn’t warn them.
❌ “I canceled as soon as my new insurance started”
If coverage started on the 1st, the premium is usually owed.
❌ “I didn’t know I could appeal”
Lack of knowledge does not extend appeal deadlines.
When an Appeal Might Work
An appeal may succeed if you can show:
A documented system error
Written proof of incorrect instructions
Enrollment without your consent
Proof that the exchange failed to process a timely request
A missed cancellation due to an acknowledged administrative mistake
These cases require specific evidence, not just frustration.
What to Do If You’re Still Being Billed
If you’re facing a bill after cancellation:
Step 1: Check the Effective Termination Date
Confirm the exact date your coverage ended—not the date you called.
Step 2: Review Appeal Eligibility
Not all disputes qualify for appeals. Filing the wrong appeal wastes time.
Step 3: Act Fast
Deadlines are strict. Waiting can permanently close your options.
Step 4: Use the Right Language
Appeals fail when they rely on emotion instead of regulatory criteria.
Don’t Repeat the Mistake in This Case
The biggest takeaway from this case is not that appeals are impossible—it’s that most people appeal the wrong way, too late, or on the wrong grounds.
That’s exactly why AppealTemplates.com exists.
Get Help Before Your Appeal Is Denied
If your health insurance was canceled but you’re still being billed, you may still have options—but only if your appeal is properly framed and timely filed.
👉 Download a step-by-step health insurance appeal template
👉 Learn which arguments actually work
👉 Avoid fatal deadline mistakes
Visit AppealTemplates.com to get attorney-written appeal templates and guides designed for real insurance denials and billing disputes.
