About 38 percent fewer insurers will participate in Obamacare next year than in 2017, according to a new federal report.

For 2018, 141 insurers submitted applications to offer plans on healthcare.gov, which is used by residents in 39 states and the District of Columbia to sign up for Obamacare. That is down from 227 insurers that submitted plans at the initial deadline last year.

The Centers for Medicare and Medicaid Services report released Monday also showed a steep decline in insurer participation at the start of last year's open enrollment. Although 227 insurers initially submitted plans, only 167 insurers participated in open enrollment in the fall.

However, insurers can decide later whether to participate in Obamacare, as the final deadline is not until the fall. Open enrollment for 2018 is expected to start in November.

The Trump administration was quick to blame the sharp decline on the law's instability.

"Insurers continue to flee the exchanges, causing Americans to lose their choice for health insurance or lose their coverage all together," said CMS Administrator Seema Verma.

Some insurers have said that they are leaving the markets because of mounting financial losses, while others have said they are leaving due to uncertainty surrounding Obamacare's future.

Another reason for some defections has been the Trump administration's unwillingness to give cost-sharing payments to insurers to reduce co-pays and deductibles for low-income Obamacare customers.

The drop in signups is sure to play a large part in the growing debate over the future of the law. Republicans have said that the insurer defections, coupled with major premium increases in some areas for next year, are proof that the law is collapsing and relief is needed.

Democrats counter that Republicans are trying to sabotage the individual market, which houses Obamacare's exchanges and used by people who don't get insurance through work. They point to the Trump administration's lack of actions on insurer payments and the GOP's repeal efforts.