Blue Cross-Blue Shield of Maryland has proposed a revolutionary takeover of the $900 million-a-year Medicare health insurance program that serves an estimated 350,000 elderly people in the state, officials said yesterday.

The proposal, according to company officials, would benefit the public as well as Medicare beneficiaries and health care providers by offering a broader range of services and perhaps a rebate on fees. But hospital representatives have protested the proposal, objecting to the "shroud of secrecy" in which the plan was developed.

Gov. Harry Hughes and Attorney General Stephen H. Sachs also have expressed concern about the impact that the program could have on competition. Sachs has criticized Blue Cross-Blue Shield before, charging that it has a monopoly position in the state. His office filed an antitrust suit against the insurance firm and its Washington and national counterparts last year.

The U.S. Health Care Financing Administration, which is studying the proposal, said more discussions are needed before a final decision is made. "It is an intriguing, interesting idea," said administrator Carolyne K. Davis, "but we are in a preliminary stage."

Davis said no decision is likely for several months.

The new program proposed by Blue Cross-Blue Shield would allow the company to sell alternatives to the traditional Medicare coverage, including traditional health insurance policies, Blue Cross-backed health maintenance organizations (HMOs) and SelectCare, a Blue Cross plan in which consumers use doctors who charge lower fees in return for having the referral by the insurance company. None of those alternatives is available under the present Medicare program.

Medicare beneficiaries living in Montgomery and Prince George's counties would not be affected since they are served by Blue Cross-Blue Shield of Washington.

Officials said that the Maryland proposal indicates a shift in responsibility for health care from the federal government to the private sector -- a change that is in keeping with Reagan administration policies favoring the return of government services to private industry.

"It is a shift in the sense that the risk for the program will be shared by Blue Cross-Blue Shield and the federal government," said Nicholas G. Greaves, vice president for public affairs for Blue Cross-Blue Shield of Maryland. "But the federal government will still be responsible for approving the types of coverage available to the Medicare population."

Greaves said that the proposal would allow his company to insure Medicare beneficiaries in Maryland rather than just administer the Medicare program in Maryland for the federal government.

Medicare provides health benefits for those 65 and older.

Under the present program, Blue Cross-Blue Shield of Maryland receives an administrative fee that Greaves said amounts to less than 2 percent of Medicare benefits. Currently, that would amount to about $18 million a year for his company.

Greaves said he could not project how much money his company might make under the proposal. "That would depend," he said, on how many Medicare beneficiaries opted for the less expensive HMO or SelectCare programs.

Under the proposal, Blue Cross-Blue Shield would be paid by the federal government a monthly amount that would be based on the number of Medicare beneficiaries.

"If that covered the medical costs for beneficiaries and our administrative costs, there would be a profit," he said. Half of the profit would go to the federal government, he said, and the other half would be split between Blue Cross-Blue Shield and Medicare beneficiaries, who would receive a rebate.

Federal officials said that the Blue Cross-Blue Shield proposal was one of more than 100 plans submitted in response to the agency's Jan. 30 notice in the Federal Register inviting proposals for cost-cutting programs.

While the health care administration has been reviewing the Maryland plan, other members of the health care community have been trying to find out about the proposal and how they might be affected.

"We heard about it three weeks ago through the grapevine and asked Blue Cross to share the contents of the proposal with us," said Wade, the hospital association spokesman. "But they wouldn't do it."

Greaves said, "We have not been as secretive as hospital officials have made us out to be. We didn't brief them because we hadn't worked out all the details of the program."

Richard H. Wade, vice president for public affairs of the Maryland Hospital Association, said that Richard J. Davidson, president of the Maryland Hospital Association, met two weeks ago with Robert Heird, the acting president of Blue Cross-Blue Shield of Maryland, and suggested that that a new proposal be developed that would include other organizations, such as the hospital association.

"There was no immediate answer," Wade said, "but about a week ago, they notified us that the proposal had to move forward at the pace they had set and they were anxious to get this approved by HCFA."

But the timing could be affected by the concerns now being voiced by such people as Attorney General Sachs, who said yesterday in an interview: "I am profoundly skeptical of any arrangement that rewards the Blues for a monopoly position in the marketplace that was, in our judgment, attained in violation of the antitrust laws of Maryland and national antitrust laws."

"In our lawsuit, we allege that the Blues of Maryland and the Blues of Washington entered an agreement to market territory -- it's like a Chevy dealer in Cheverly and a Chevy dealer in Gaithersburg agreed not to sell Chevrolets in each other's territory," Sachs said.