The death knell came Sunday, when Reid called Lieberman to his office after his appearance on "Face the Nation," according to Senate aides briefed on the conversation.
Lieberman met with Reid as well as White House Chief of Staff Rahm Emanuel, Deputy Chief of Staff Jim Messina and White House Office of Health Reform Director Nancy-Ann DeParle.
Lieberman told them the core of the bill was fine with him, but he couldn't support it with the Medicare provision, which he said would drive up federal spending.
Despite private frustration with the Connecticut senator, many Democrats appeared eager to move on. "I want to see healthcare reform," said Sen. Sherrod Browd (D-Ohio), a leading proponent of creating a new government insurance plan. "There's going to be a good bill."
Sen. Arlen Specter (D-Penn.), who joined the party this year, drew applause for rallying the Democratic lawmakers gathered just off the Senate floor.
"I came to your caucus to be your 60th vote," he said, according to a Democratic aide briefed on the meeting.
"Don't let these obstructionists win."
James Oliphant in the Washington bureau contributed to this report.