My parents are visiting the USA and will be splitting their time between Maryland where I live and New York where my sister lives. If I buy insurance for them, can I put in my sister's address in the application since most of these plans can't be bought in Maryland?
You can absolutely put your sister's address in the application instead of yours. The exclusion for Maryland is applicable only for those who are physically in Maryland at the time of purchase. However, your parents will still be covered anywhere in the US, including the states listed in the exclusion for purchase.
Insurance rates are regulated by law. You can't find the same insurance plan for a lower price anywhere else