The board that oversees a new state health insurance program met for the first time yesterday - the day the law creating the program went into effect - and began reviewing the questions it will have to answer before it can start issuing policies in one year.

The Maryland Health Insurance Program is designed to provide coverage for those who can't get conventional policies because of their medical histories.

It will replace an old state program, currently covering about 7,000 Marylanders, which has been criticized for years as a windfall for insurers offering thin benefits at high prices. That program offered a 4 percent discount on hospital bills to insurers who offered "open enrollment" policies regardless of medical history. The amount of those discounts - about $52 million a year - will now go to subsidize the new program.

"There's an incredible amount of work that will need to be done" before the program is operational, Insurance Commissioner Steven B. Larsen told his fellow board members: three other state officials and one consumer representative. While many decisions need to be made in short order, he said, the initial meeting was "largely informational," so the board could learn the task before it.

Insurance administration staff members, who have been doing the groundwork for the program until the board began operations and could hire a director, ran through some of the myriad questions that will need to be answered:

What medical conditions make someone uninsurable? Should the benefits include unlimited prescriptions? Should it offer different packages of benefits at different prices? What rules should the program have for its network of doctors and hospitals? How will it shift the 7,000 members of the old program into a new one with different benefits? How much staff is needed to manage the program?

"We've just touched the tip of the iceberg," said Donna Imhoff, deputy insurance commissioner.

The rush to get the program going, Imhoff told the board, came because the three insurers who had been writing open enrollment policies - CareFirst BlueCross BlueShield, Mid Atlantic Medical Services Inc. and Aetna U.S. Healthcare - indicated that they wanted to get out of the business.

They will continue to cover current members until the new program is running, and CareFirst will offer one more open enrollment period as well.