SACRAMENTO, Calif. -- Gov. Arnold Schwarzenegger's health care reform plan was in trouble Wednesday night after a negative report raised concerns about the proposal and the California Nurses Association rejected it.

The Schwarzenegger plan also suffered a serious setback when a mother, whose daughter died after being twice denied by her insurance company, spoke out against the proposal at the state Capitol Wednesday.

VIDEO: Schwarzenegger Health Care Proposal Struggling

Hilda Sarkysian's 17-year-old daughter Nadaline was denied a liver transplant twice before the insurance company approved it. By then, it was too late for the girl.

"Insurance companies cannot decide who's going to live and who's going to die," Sarkysian said. "In my daughter's case they decided it was too expensive and they're not going to pay for it."

Sarkysian joined with California nurses who declared their opposition to the Schwarzenegger plan, NBC11's Mike Luery reported.

Democrats are also divided on the plan. "This universal health care proposal really does not help the working poor, the average Californians," said State Sen. Leland Yee,D-San Francisco.

The governor's plan also took a hit when an independent review found a potential $4 billion deficit its fifth year, Luery reported.

That didn't sit well with both Democrats and Republicans in Sacramento, who are concerned about the state's potential $14 billion budget deficit.

"Clearly what you have before you Madame Chair and members, would create one of the largest programs in state government," said legislative analyst Liz Hill during a hearing at the state Capitol Wednesday.

The proposal continued to receive key support from Assembly Speaker Fabian Nunez, D-Los Angeles, who said the numbers add up.

"We feel very strongly that our plan is strong," Nunez said. "It makes sense. It's fully paid for."

A hike in the state's cigarette tax of roughly $1.75 a pack would help pay for the program, but some critics are concerned that that revenue could go up in smoke as the number of smokers declines, Luery reported.

Schwarzenegger defended the plan Wednesday, saying he was optimistic it would improve the lives of nearly 4 million Californians not currently covered.

"The fact is more people are for it than against it and I think that will put it over the top in the end," Schwarzenegger said.

The governor's plan remains stalled in the Senate Health Committee, which ended its Wednesday session without a vote, Luery said.

The possible vote has been delayed until Monday, giving Democrats more time to regroup, because they are currently short on votes, Luery reported.