WASHINGTON – Sen. Susan Collins of Maine announced during a press conference Thursday she will introduce legislation that would prevent parents from being forced to relinquish custody of their seriously mentally ill children in order to obtain health care for them.

The bipartisan “Keeping Families Together Act” would set aside $55 million in grants to help states improve health care for mentally ill children and create a task force to study ways to improve such care.

It also would make more children and adolescents eligible for Medicaid, the health insurance program for the poor, if they receive treatment at home or at community-based facilities. Currently, those children are covered only when they receive care in residential facilities, such as hospitals.

In 2001, parents gave up custody of more than 12,700 seriously mentally ill children nationwide because they could not afford the expensive health care costs, according to a report by the U.S. General Accounting Office.

“This is just the tip of the iceberg,” Collins said, noting that many states did not respond to the GAO survey.

Despite a law in Maine that allows parents to voluntarily place children in child welfare systems without relinquishing custody in order to access mental health services, there are still problems.

Collins said the state does not have enough community-based mental health programs to meet the demand, so children sometimes have to be sent to programs out of state.

“Too many children are sent to residential treatment centers far away from the state at tremendous costs … . Maine needs to do more to develop community-based care for families with children with mental illnesses,” she said.

Moreover, Collins said, state and federal aid is so complex that parents often don’t understand their options.

Carol Carothers, executive director of the Maine office of the National Alliance for the Mentally Ill, a nonprofit advocacy group, said that often neither private insurance nor Medicaid covers the costs of home-based treatment. As a result, she said, parents face a choice: keeping their children at home or getting them the care they need.

Collins said, “In the long run, if we can develop a community-based system, not only would it be a more compassionate treatment for the children, but it would also be less expensive than sending them to out-of-state residential care facilities.”

Collins was joined Thursday by Sens. Norm Coleman, R-Minn., and Mark Pryor, D-Ark, who are co-sponsoring the legislation in the Senate. Also participating were Reps. Patrick Kennedy, D-R.I., and Pete Stark, D-Calif., who are introducing a similar bill in the House.