Blue Cross of California won support from healthcare organizations and providers testifying last week on its plan to create a $2 billion health foundation.
But some community groups and Consumers Union criticized the plan at a Los Angeles hearing before state Commissioner of Corporations Gary Mendoza.
Mr. Mendoza has not said when he will decide on Blue Cross' proposal.
Blue Cross proposed the foundation in response to criticism that its creation of for-profit WellPoint Health Networks sidestepped a state law that requires companies that convert to for-profit status to donate their assets to charity.
At hearings in San Francisco and Los Angeles, Blue Cross announced that Leonard D. Schaeffer, its chairman and chief executive officer, would not join the board of the new foundation. He decided that he would not be able to devote enough time to the foundation, said Patrick Garner, Blue Cross senior vice president.
The foundation's board will otherwise be identical to the 19-member Blue Cross board, a sore point with critics of the plan.
"Blue Cross and its for-profit HMO, WellPoint, would control the foundation and could be the main beneficiaries of the foundation's money," said Jeanne Finberg, a Consumers Union attorney, at the Los Angeles hearing.
Consumers Union and community organizations also faulted Blue Cross for not performing a thorough assessment of the state's needs, and instead inviting groups to apply for grants and then soliciting their support of its plan. "We have been relegated to fighting among each other...Blue Cross has exploited the absolute desperateness of people," said Arroldo Torres, testifying for the California Hispanic Health Care Association, a statewide affiliation of clinics.
Critics also faulted Blue Cross' plan to give the foundation "social welfare" tax status, which would allow it to use funds to lobby. If the foundation were set up as a charity, it would have to follow stricter financial reporting rules.