Michael Chadwick is all for Obamacare insurance—up to a point.

The 32-year old Manhattan realtor was uninsured in his late twenties, and he was optimistic when he initially signed up for coverage three years ago. Then, his income changed.

"I couldn't keep up with the payments, so I had no health insurance for the remainder of 2014," Chadwick explained to CNBC. He had a better year in 2015, and he's hopeful he'll be able to maintain his health coverage again this year. Still, he expressed frustration with the law's mechanics.

"The Affordable Healthcare Act (ACA) doesn't take into account that small business owners may not have consistent income," he said.

Read MoreMr. President, we need answers on Obamacare

Recently, the Obama administration said 11.3 million Americans had signed up for 2016 health exchange plans by late December. That's better than administrations cautious estimate that enrollment would top out at 10 million this year, and open enrollment does not end until January 31st.

Health care observers, however, see the milestone differently.

"That's still significantly lower than what experts had initially expected at this point in time in exchange implementation," said Caroline Pearson, senior vice president with health care consulting firm Avalere. "We had anticipated, based on the Congressional Budget Office estimates, that perhaps 21 million people might be enrolled in 2016."

Avalere researchers say keeping up with exchange plan costs is a challenge for many Americans. In 2016, those with annual income of up to $47,000 are eligible for subsidies in the form of tax credits.

For lower income earners, those subsidies can cut monthly premiums substantially. For those near the higher end of the scale, however the credits aren't as nearly generous.

"Many middle income people continue to suggest that exchange plans just aren't affordable for them," Pearson told CNBC. "Even with the subsidies, they simply can't make the monthly premiums work in addition to all of the out of pocket costs."

Yet while consumers see high prices, insurers are seeing high costs on exchange plans. Obamacare enrollees tend to be older and use more medical care. Nearly half of those enrolled for 2016 are older than 45 years of age.

Under the ACA, insurers were expecting to be reimbursed by the government for some of their losses in the first three years of the exchange rollout—but the funding for reimbursements has fallen far short.

As a result, a dozen nonprofit co-op insurers, which were launched in 2014 as part of the ACA, were forced to close this year because losses put them deep in the red. And even the nation's largest health insurer, UnitedHealth Group threatened to stop selling money-losing exchange plans next year.

Standard & Poor's credit analyst Neal Freedman says the Obamacare exchange market is still a work in progress, but for insurers 2016 will be pivotal.

"If the sicker people are the ones signing up, can this be priced for?" asked Freedman.

"Companies are taking pricing actions, they're reconfiguring their products; they're doing administration things; they're doing medical management things," he said. "What we're going to know next year is what works and what doesn't."

Analysts say the year-end budget deal delaying the implementation of taxes on the industry could help limit plan prices for 2017. But the real key is getting more healthy people to sign up and stay enrolled.

The problem is that younger and healthier consumers are more likely to forego coverage altogether. That's one reason why the government designed penalties for uninsured. Incidentally, those amounts are set to rise this year to a minimum of $695, or 2.5 percent of your income, whichever is higher.

Like a lot of millennials, Michael Chadwick feels like he's paying for more coverage than he really needs because he is healthy. But he also has a personal incentive to maintain coverage.

"I'm paying a little bit per month for the peace of mind, so my Jewish mother can sleep at night," he said.

On the Money airs on CNBC Saturday at 5:30 am ET, or check listings for air times in local markets.