Obamacare premiums are going up by an average of 25% next year Obamacare premiums are going up by an average of 25% next year

Larry Downing/Reuters

The Obama administration says that Obamacare health-insurance premiums will go up by an average of 25% in 2017.

This, it argues in a new report, is because prices are slowly getting in line with costs.

From the report:

Notably, Marketplace rates through 2016 remained 12 to 20 percent below initial projections from the independent Congressional Budget Office. In addition, Urban Institute researchers recently found that 2016 Marketplace premiums were well below premiums for comparable employer coverage. Even with this year's increases, Marketplace premiums in 2017 will still be roughly in line with the projections by the Congressional Budget Office.

HHS

The news comes as another blow to the Affordable Care Act (ACA), which critics have argued simply doesn't work. And over the past year, many companies large and small have agreed. The country's largest insurer, UnitedHealth, has said that it would roll back some of its Obamacare offerings.

Oscar, a startup created specifically to facilitate the ACA, is pulling out of markets in Dallas and New Jersey.

Additionally, while 15 insurers will be joining the ACA exchanges, 83 are leaving, according to the administration.

But President Barack Obama remains optimistic that the plan will get through these growing pains.

"You're getting better quality, even though you don't know that Obamacare is doing it," Obama said before a crowd in Florida last week.

"Thanks, Obama," he added.