The IRS penalty designed to force people to buy health insurance coverage under the Affordable Care Act doesn't seem to be working. The New York Times reports:   

Two years after the Affordable Care Act began requiring most Americans to have health insurance, 10.5 million who are eligible to buy coverage through the law’s new insurance exchanges were still uninsured this fall, according to the Obama administration.

That number appears to be shrinking: Administration officials said last month that about 2.5 million new customers had bought insurance through, the federal exchange serving 38 states, since open enrollment began on Nov. 1. The number of new enrollees is 29 percent higher than last year at this time, suggesting that the threat of a larger penalty may be motivating more people to get covered.

But plenty of healthy holdouts remain, and their resistance helps explain why insurers are worried about the financial viability of the exchanges over time. They say they sorely need more healthy customers to balance out the costs of covering the sicker, older people who have flocked to exchange plans.

People, like Mr. Murphy, who earn too much to qualify for federal subsidies that defray the cost of coverage may be most likely to opt out. A recent analysis by the Kaiser Family Foundation found that more than seven million people who are eligible for exchange coverage would pay less in penalties than for the least expensive insurance available to them. More than half would not qualify for subsidies, the analysis found.

Why do so many Americans prefer a penalty? Ed Morrissey attributes this to something fairly simple: "shockingly, Americans by and large can do the math."  

Premiums are going up and most of these expensive policies also have high deductibles–sometimes a patient must spend $12,000 out of pocket before her coverage kicks in. So people are making choices based on realistic calculations.

Still, it is galling that U.S. citizens have to pay ahefty fine because they don't want to buy a lousy product.