The bipartisan failure of the individual mandate

But congressional Democrats are culpable as well, in fact more so than Republicans. The truth is that the individual mandate was too modest to have any major impact. For starters, there were many exemptions — for instance, the hardship provision. Relatedly, Obamacare also allowed adults up to the age of 26 to stay on their parents’ insurance, thereby giving certain healthy, young people no reason to enroll for themselves. Beyond that, the penalty is incredibly weak, capped at 2.5 percent of income. Finally, payment of the penalty is through the annual tax-filing process, meaning that it is up to the IRS to catch those who simply do not pay it.

Back in 2009 and 2010, Democrats caught a break from the Congressional Budget Office, which decided that this milquetoast penalty would be sufficient to induce healthy people to purchase a product they did not expect to use. This made Obamacare look good on paper, but in reality everybody knew (or should have known) that it was too modest to have much of an impact.

Any time both parties in Congress fail to do something, or do something wrong, we should pay special attention. Anything that afflicts both sides of the aisle suggests an institutional problem with the legislature. And indeed, the bipartisan failure with the mandate is illustrative of an issue I have discussed before, namely that Congress does a terrible job of planning the economy.