Early bipartisan talks on healthcare reform in the Senate face enormous hurdles trying to get over wide partisan divisions on Obamacare's Medicaid expansion and taxes.

Several Republican senators and three Democrats met Monday night to discuss a bipartisan path forward on healthcare reform. But by Tuesday, the stark political reality sank in.

Republicans need to stop talking about repealing Obamacare if they want to hold serious bipartisan talks on healthcare reform, several Democrats said. The desire to focus on "repairing" the healthcare law has been a common talking point in the party.

"I don't think there is a Democrat that would vote for any type of a repeal," said Sen. Joe Manchin, D-W.Va., who attended the meeting. "I think there would be 48 Democrats willing to work on repairing and fixing."

But beyond rhetoric, some Democrats outlined several key concerns in the meeting organized by Sens. Bill Cassidy, R-La., and Susan Collins, R-Maine.

"Several Democrats expressed concern regarding Medicaid cuts," Cassidy told reporters Tuesday.

Democrats said the $880 billion in cuts in the American Health Care Act, which passed the House earlier this month, are not acceptable.

"They have a long, long, long way to go to demonstrate they are not decimating Medicaid," Sen. Bob Casey, D-Pa., told the Washington Examiner. Casey did not attend the meeting.

"If there is an $880 billion cut to Medicaid, then that just completely destroys the program, so that is completely unacceptable," added Sen. Edward Markey, D-Mass., who didn't attend, either.

Manchin added Republicans shouldn't repeal most of Obamacare's taxes, which are expected to generate $575 billion from 2017 to 2026. Republicans had hoped to use savings from an Obamacare repeal for tax reform.

"The bottom line is what needs to be taken off the table is the $575 billion giveback, basically tax cuts," he said.

Manchin is up for re-election next year in a state President Trump won by 42 percentage points. Manchin attended the meeting alongside Sens. Heidi Heitkamp, D-N.D., and Joe Donnelly, D-Ind., who are also up for re-election, according to news reports.

A separate working group of about 14 Republican senators is discussing how to move forward on healthcare repeal. The entire GOP Senate conference is also meeting several times a week for lunches to discuss it.

Republicans are largely ignoring the American Health Care Act in favor of drafting their own bill.

Senators have not discussed preserving all of Obamacare's taxes. The American Health Care Act repealed the taxes except for the Cadillac tax on high-cost health plans but wouldn't start collecting that revenue until the next decade.

Key Medicaid reforms such as converting the payment model to per capita caps or a block grant are being discussed, according to senators in the group.

The federal government funds Medicaid currently through a fee-for-service model. A per capita model would cap federal funding based on the number of Medicaid beneficiaries in a state at a given time, and a block grant would give a state a fixed amount of money.

The House legislation would keep the Medicaid expansion intact until 2020. After that, a state could choose between a block grant or a per capita cap.

Medicaid is a major sticking point in the working group's discussions, with centrists and conservatives battling over when to unwind the expansion. Conservatives want to unwind the expansion faster, while centrists are opting for a slower withdrawal.

Cassidy said that a bill authored by Collins and himself gives the best compromise on Medicaid.

The bill introduced earlier this year would let states choose three options: Keep Obamacare, set up an alternative option that keeps Medicaid expansion dollars flowing, or set up a new alternative with no federal assistance.

"We think it addresses the Medicaid problem in a way which could be bipartisan," he said.

Cassidy said the initial bipartisan meeting could continue and he said that a few Democrats wanted to attend on Monday but couldn't.

He said the meetings aren't a formal gathering and that he isn't looking to compete with the working group that contains members of the Senate's Republican leadership. He added that there is no harm in talking separately since the working group hasn't reached a consensus yet.

"How do you compete when there is no plan?" he asked.