It’s pretty clear at this point that premiums for health insurance plans sold on Obamacare marketplaces are going up in 2017 more than they have in previous years—an average of 25 percent—the U.S. Department of Health and Human Services said in a report today. That’s more than last year when premiums went up an average of 7.5 percent.

Not only that, but over the last month, some major national insurers, notably UnitedHealthcare and Aetna, announced that they were pulling out of the marketplaces in some states. They complained they’re losing money on their marketplace business, partly because it has attracted older and sicker members than anticipated. And more than half of the 23 nonprofit state insurance co-ops set up as an alternative to commercial plans have been shut down because they’re no longer financially viable.

The upshot is that shoppers who sign up at marketplaces during open enrollment season (this year it runs from Nov. 1 through Jan. 31) are going to find higher prices on a lot of plans, and, in many states, fewer health insurance companies offering those plans. A preliminary analysis by the nonpartisan Kaiser Family Foundation found that in 2017, residents of 62 percent of the nation’s counties will have a choice of only one or two insurance carriers. Last year, only 32 percent of counties had so few choices.

Still, regulators could be doing a better job of pushing back against rate increases. “Health plans claim they play this wonderful role in negotiating price aggressively with providers and innovating new techniques for holding down healthcare costs,” says Lynn Quincy, director of the Healthcare Value Hub for Consumers Union. “But when it comes to premium increases, they seem unable to do these things. We should be asking them why they aren’t.” In some cases that means changing state insurance laws to give regulators more power to scale back rate increases.

The bottom line is that the law has survived many attempts at repeal, has extended health coverage to more than 20 million previously uninsured Americans, and in the process has driven the number of Americans without health coverage to an all-time low of about 9 percent. Its subsidy and marketplace structures remain intact.

Unfinished Success

Does that mean health reform is doomed? No. Here are some critical things to understand:

A lot of what’s happening is called capitalism, in which some companies win and some lose. “In California, of the top three carriers, Blue Shield and Anthem may have underpriced in the beginning and are now coming in with high increase requests,” says Betsy Imholz, Special Projects Director for Consumers Union, the policy and mobilization arm of Consumer Reports. “Kaiser did the opposite. It overpriced in the beginning, then dropped way down and now looks like a very good deal.” And some companies, like Aetna and UnitedHealthcare, made the business decision to exit the marketplaces rather than rack up losses or turn off customers with higher premiums. 

Meanwhile, other companies are doing just fine. “Companies like Centene and Molina, which were previously in the business of running Medicaid managed care plans, targeted the previously uninsured,” says Kevin Lucia, research professor at Georgetown University’s Center on Health Insurance Reforms. “They price right, are doing okay, and are in it for the long haul.” Centene offers marketplace plans in 13 states under its Ambetter brand, and Molina is in 11 states. 

Protection From Price Hikes

For consumers the most important thing to know is that about 85 percent of people buying on the marketplace are insulated almost entirely from these rate increases because they get a tax credit to offset the cost of their insurance premium. The tax credit is based on a formula that takes into account total income plus the cost of a benchmark Silver plan. The credit guarantees that consumers who buy that benchmark plan won’t pay more than a specified percentage of their income for it. “That tax credit will absorb almost all of the rate increase,” says Karen Pollitz, senior fellow at the Kaiser Family Foundation. “But with rate changes and competition, the benchmark plan may be from a different insurer than it was this year. If that happens, in order to take full advantage of your subsidy you may have to change plans.” 

People who aren’t eligible for subsidies may face daunting premium increases in some states and don’t really have good choices. They should shop around in hopes of finding a better deal, Pollitz says, but should be aware that lower premiums may come with higher deductibles or smaller provider networks.  

There are things you can do to get ready for open enrollment if you buy your coverage through a marketplace.

• Pay attention to any notices you get from your health plan over the next month. If your insurer is exiting the marketplace, it’s supposed to tell you, Pollitz notes. It’s also supposed to tell you about any important changes in your plan, such as a premium increase or a shrinking provider network.

• If you have met all or most of your deductible for the year, schedule elective visits and procedures before Jan. 1, when the deductible resets.

• Make a rough budget for your healthcare needs for 2017. What prescriptions do you take regularly? How many doctor visits do you tend to make in a year? Are there any big medical events coming up, such as the birth of a child or a joint replacement?  You can’t predict emergencies, of course, but knowing your baseline health needs will help you pick a plan and take full advantage of the cost calculators that are cropping up on insurer and marketplace sites.

In the longer run, premiums will continue to rise—for both marketplace plans and the employer plans that insure the vast majority of working-age Americans and their families—unless we get  “a lot more aggressive about bringing down the underlying cost of healthcare,” Quincy says. You can learn more about Consumers Union’s efforts to understand and control medical costs at its Healthcare Value Hub

*Update: This story has been updated to reflect the news out today from the Department of Health and Human Services that health insurance plans sold on Obamacare marketplaces will be rising in 2017 by an average of 25 percent for the lowest-priced plan in the Silver category.