These were the arcs for Billy and Paula that were set long ago. It’s been inevitable that they would butt heads and have a serious falling out. They are both too stubborn to budge. It’s still not totally irreparable, but things will never be the way they were when George was still alive. George distracted Paula from focusing on Billy and also functioned to ease their differences somewhat. In addition, Paula was much less of a religious fanatic back then.
This also points out why Universal Healthcare is such a vital goal in the US, the only major industrialized nation not to have it! Healthcare is a right, not a privilege. No one should have the ability to withhold healthcare to force another person to do as they demand. Paula is the embodiment of what is wrong with the US today!
Legally, Paula is still obligated to take care of Billy including paying for his healthcare. Realistically, it might take more time, financial resources, and energy to force her to fulfill her obligations though. She might get away with her illegal behavior (just as some, higher profile criminals are getting away with their illegal actions).