The recently released Surgeon General's Report on Mental Health is the equivalent of describing the maiden voyage of the Titanic without mentioning the iceberg. While the report criticizes private insurance companies for failing to provide "parity" in their coverage of mental illnesses, it is totally silent on the failure to provide parity in Medicaid, the federal government's insurance program.

For the most severely mentally ill, private insurance is essentially meaningless. Because of their illnesses, most are indigent, and private insurance is a luxury they cannot afford and are not in a position to obtain through employment.

Many of these individuals do have insurance through Medicaid: a federal insurance program that covers their care, except for a single exception--inpatient care in psychiatric hospitals. The federal government's Institution for Mental Diseases (IMD) exclusion prohibits Medicaid from reimbursing for most individuals who need care in a psychiatric hospital. If you have a disease in your heart, liver or any other organ and need treatment in a hospital, Medicaid contributes. But if you have a disease in your brain and need care in a psychiatric hospital, Medicaid does not.

As a result of this federally sanctioned discrimination, state psychiatric hospitals are locking the front door and opening the back, making it increasingly difficult for the most severely ill to get inpatient treatment. They are discharging patients sicker and quicker in a headlong dash to make them Medicaid eligible by ending their inpatient residency.

There were about 470,000 individuals receiving inpatient psychiatric care in state hospitals when the Medicaid program started in 1965, compared with fewer than 60,000 today. Hospital closures have actually accelerated in recent years. Forty state hospitals shut their doors between 1990 and 1997, nearly three times as many as during the entire period from 1970 to 1990, and many more closings are planned.

Of the 3.5 million Americans with schizophrenia and manic-depression, 40 percent (1.4 million) are not being treated. Medicaid's denial of coverage results in homelessness, incarceration, victimization and even death for many people who are so ill they are unable to care for themselves. By the Justice Department's own statistics, there are currently about 283,800 mentally ill people locked up in the nation's jails and prisons.

The Los Angeles County Jail and New York's Riker's Island are currently the two largest "treatment facilities" for the mentally ill in the country. Another 150,000 to 200,000 mentally ill are homeless, and 28 percent get at least some of their meals from garbage cans. More than 10 percent will die from suicide. Others will commit acts of violence against family, friends and total strangers.

Not only does federal discrimination hurt the mentally ill, it affects the standard of living for everyone else, too. Many parks and public libraries, once enjoyed by all, are now rendered nearly unusable to the general community by the visions of lost, psychotic souls who need inpatient care but are locked out by the discrimination embedded in Medicaid law. Seemingly random acts of violence committed by individuals with a history of mental illness are frequently reported on the evening news. No amount of preaching by the Surgeon General against "stigma" will overcome the acts of a Russell Weston, a Ted Kaczynski or an Andrew Goldstein, all persons with untreated schizophrenia.

The federal government must accept its share of criticism for a policy that discriminates against individuals solely on a diagnosis of mental illness. We must steer clear of the iceberg that sank our state psychiatric hospital system and eliminate the Medicaid IMD exclusion.