Maryland insurance officials yesterday approved a 200 percent rate increase for a senior health care program after the program sponsor agreed to restore several benefits for 1,300 participating seniors in the Washington-Baltimore area.

The action clears the way for M.D.-Individual Practice Association to raise the monthly rate for its SeniorCare Program to $62.13 per person, effective Feb. 1. The monthly rate has been $22.22 per person.

"With the benefits that have been added, the rate seems to be perfectly justified," said Sidney Green, chief of the insurance division's life and health section.

Representatives of seniors who have been fighting for the added coverage, particularly the partial reimbursement for seniors' pharmacy purchases, said they were pleased with the outcome.

"It has worked out," said Hanita Schreiber, director of member services of the nonprofit United Seniors Health Cooperative, which has been negotiating with M.D.-IPA for improved benefits. "The plan is acceptable to M.D.-IPA so they will continue the coverage, and the seniors we have talked to feel it is a plan they can live with."

Joseph L. Guarriello, vice president of corporate affairs for M.D.-IPA, said his organization was waiting for confirmation of the state's action. "I think we have come to an agreement with the parties involved, which is appropriate and agreeable to all of us," he said.

The controversy over the M.D.-IPA rate increase erupted in early December when the organization sent notices of its intention to triple rates and sharply reduce benefits. The revision was necessary, officials said, to cover higher costs and limited federal reimbursement for Medicare expenses.

Senior citizens immediately challenged the rate increase, which had been approved by the Health Care Financing Administration and was scheduled to take effect Jan. 1.

Maryland deputy insurance commissioner Martha Roach, responding to the complaints, announced that her office was postponing the rate increase until it could be reviewed. Roach said that M.D.-IPA would have to have state as well as federal approval to implement the increase.

Meanwhile, M.D.-IPA officials began meeting with representatives of the Montgomery County Office of Consumer Affairs and the United Senior Health Cooperative to try to work out a compromise. The negotiations led to the M.D.-IPA revised filing in which several benefits were restored, officials said.

Most important, Schreiber said, was the pharmacy benefit. Last year participating seniors paid 20 percent of their pharmacy bills after meeting a $35 deductible for the year, officials said. The original plan for 1988 provided no pharmacy benefits.

The revised filing approved yesterday provides for seniors to pay 30 percent of their pharmacy bills, with no deductible.