First the carrot didn’t work and now the stick is failing to prod uninsured Americans into buying ObamaCare policies.

They are availing themselves of built-in loopholes to avoid paying the penalty for not having health insurance.

According to the tax preparer TurboTax, seven out of ten people filed for an exemption from President Obama’s individual mandate to carry health insurance. The biggest reasons were because of cost; they either could not afford the healthcare plans in their area –including ObamaCare plans – or they couldn’t afford plans from their employer.

If uninsured Americans still find ObamaCare too expensive even with hundreds to thousands of dollars’ worth of taxpayer-funded subsidies, the President’s signature solution fails its core mission of healthcare affordability.

The un-Affordable Care act offers a bevy of exemptions to the individual mandate, including for being homeless; facing eviction or foreclosure; having a death of a family member; filing for bankruptcy; experiencing a fire, flood, or other natural or human-made disaster; or if your state refused to expand Medicaid eligibility to include you.

We’ve been told until now that the uninsured were ignorant about the tax penalty and ObamaCare. The Administration has been targeting outreach efforts to reach them. It increasingly is apparent that Americans know about ObamaCare and the tax penalty for not carrying insurance, but either are willingly opting out and paying a penalty or finding a way to opt out and avoid the penalty.

The Washington Times has more:

Many of those say even the cheapest plans available to them at work or on Obamacare’s exchanges are still too expensive, and so they claim the IRS’s financial burden exemption in refusing to gain coverage.

Others said they were exempt because they’d recently been evicted, had a close family member die, or had another hardship that excused them from the mandate. The rate of exemptions mirrors what TurboTax saw during the full 2014 tax season, when filers dealt with Obamacare for the first time.

“The IRS reported that about 300,000 people who paid the penalty likely qualified for an exemption last year. With the penalty nearly doubling this year, TurboTax urges those without health coverage to see if they qualify for an exemption from a tax penalty,” said Debra Hammer, the company’s spokeswoman for Obamacare issues.

The tax-prep company also says tax filers haven’t been tripped up by the IRS’ decision to delay the issuance of brand-new tax forms.

Insurers and employers issued the forms, known as 1095-Bs and 1095-Cs, so that filers have a record of their coverage and compliance with the mandate, although they aren’t attached to returns.

The IRS receives its own versions of the forms, however, and analysts said the delay could make it difficult for auditors to crack down on people who flout the mandate and claim full refunds, even though they owe a penalty.

The penalty being assessed for not carrying coverage jumped from $95 or 1 percent of qualified income — whichever is greater — in 2014 to $325 or 2 percent of income in 2015. We can expect a lot of Americans will see that and apply for exemption. It may only get worse as the penalty more than doubles to $695 or 2.5 percent of income next year. 

Affordability is ObamaCare’s Achilles heel when it should be the heart of any healthcare reform. Instead of salvaging a system that helps a few and harms many, it’s time to truly reform the system. We could have done a lot address access to healthcare for Americans without the government seizing control of a significant chunk of the U.S. economy and unleashing hardship for many doing harm to the overall economy.