When states tried to fix their individual health insurance markets—the marketplace for those who don’t get insurance through their employers—the initial idea was to simply prohibit insurers from discriminating against individuals with preexisting conditions. But that caused what insurers called a “death spiral”—ever higher premiums as relatively healthy people decided to wait until they were sick to buy insurance, leaving smaller and smaller pools of more and more expensive individuals.
The solution to this problem, both in Massachusetts and in ObamaCare, was the individual mandate: Force everyone to pay in, bringing balance to the insurance pool and keeping prices down. Of course, that only works if everyone is actually compelled to purchase insurance. And a report by the Joint Committee on Taxation last week seems to indicate that, as written, the individual mandate may not have any teeth.