As a result of the year-long investigation by the Maryland Insurance Administration, efforts to provide health insurance for uninsured Marylanders essentially ground to a halt for a year - leaving unspent up to $100 million intended for that purpose.

Program officials say the hold-up has kept them from helping the people who need health insurance the most.

The report found that the insurance program was paying claims late, not giving customers proper notice of policy changes and using out-dated contracts. The report will not be released until the end of this year but members of the insurance program's board have seen drafts and described its findings to reporters.

"We knew we had problems, but this process kept us from doing what's really important," said Karen Pollitz, a board member for the Maryland Health Insurance Plan.

Audits typically take between six and eight weeks to complete, but this investigation took longer because of all the claims and material to review, Brett Lininger, director of government relations for the insurance administration, told members of a Senate committee Wednesday.

The program, which was created in 2002, is serving about half of its capacity and running a surplus that may reach $100 million by June, said Richard Popper, the program's executive director. Board members planned to use the money to start a marketing campaign and premium subsidy program for low-income people in order to increase enrollment, but say that the investigation put them behind schedule.

The program's enrollment is now at its high, with 7,300 members. But, an important aspect of the program which subsidizes premiums has fallen about three months behind schedule because of the investigation.

While waiting to implement the subsidy program, however, board members had to cancel policies for some people unable to pay the premiums, which average about $300 a month. Now, according the plan's rules, the people who were removed from the plan must now wait a year before reapplying.

"These people are very sick, and they might not be there in another year for us to finally get to them," said Pollitz. "We may be too late now."

But at Wednesday's hearing, Senate Finance Committee members in turn criticized the program's board for not reaching more of the 800,000 Marylanders who lack health insurance.

"It sounds like you've created a product and are now searching for a market," said Sen. E.J. Pipkin, an Eastern Shore Republican.

Now that the problems have been addressed, Pollitz expects the program to be fully subscribed and "have a waiting list by next year."

In the meantime, though, board members and advocates fear that the General Assembly will try to reallocate the program's unspent funds to other health care uses.

Glenn Schneider, executive director of the Maryland Citizens' Health Initiative, urged the committee to "keep the money where it belongs."

"Spend the surplus on a real media campaign, real premium assistance and a sustainable outreach program so it can serve its members at full capacity and ultimately save taxpayers money," he said.

Currently, the insurance program receives more than $4 million each month from a hospital assessment tax. The Health Services Cost Review Commission, which regulates all hospital taxes, will not ask the General Assembly to lower the assessment as a way to reduce the surplus, but it may consider such action in the future.

"At this point, the plan is spending down its surplus and making progress," said Steve Ports, the commission's principal deputy director. "We'll see what happens."

Blaming red tape and administrative constraints, advocates and board members also asked the committee to establish the insurance plan as an entity separate from the insurance commission as a way to increase efficiency.

"We need to decide on something Monday and be able to actually do it on Tuesday instead of waiting on approval," Pollitz said. "We need to be let off our leash."