Beneath the insults leveled at Indians by James Watt, and his later apologies for his grossness, lies a longer-running, less noticed and more damaging assault. Watt will pass from power soon enough, but the sufferings of Indians were here well before the Reagan administration and promise to persist long after.

Few stories better illustrate the victimization of Indians than that of the Sioux tribe's 20-year effort to get a new hospital on its Rosebud reservation in South Dakota. The story involves the valor of several doctors and nurses who refuse to be demoralized, the helplessness of public health officials to convince the Reagan administration that budget cuts are destroying Indian lives and the reality that the health of Indians, already bad, is worsening.

The 8,000 Rosebud Sioux live in a county rated among the nation's 10 poorest. Three other South Dakota counties, all with Sioux, are also in the bottom 10. The tribe's average family income is about $30 a week. Unemployment ranges from 80 to 90 percent.

Medically, the reservation has similarities to a death camp. Mortality rates are more than twice the U.S. average. In a recent two-year period, 11 percent of Rosebud deaths were of infants. For the rest of the United States, the figure was less than 3 percent. Tuberculosis rates there are the highest in the country.

The fear of death and disease is so great that the tribe lists the absence of health care as its severest problem. The fear is not new. In 1972 the Indian Health Service, now a part of the Department of Health and Human Services, announced plans for a small hospital meant to replace an antiquated facility. One wing, built in 1915, has been condemned as a firetrap.

When announced in 1972, those plans were seen as 10 years late. This year, with construction already a decade behind schedule, the plans remain only plans: No construction money for a new Rosebud hospital is in the 1983 federal budget.

Even if this crisis were somehow miraculously resolved and the hospital immediately built, getting doctors, nurses and health care workers to the reservation would remain the permanent crisis. At times, the low salaries, poor working conditions and lack of support from officialdom in Washington have created turnstile medicine: In 1981 more than 100 doctors worked temporarily in seven physician slots. Indian Health Service nurses begin at $12,000 a year, a third less than the salaries of South Dakota's private nurses.

Without overblowing it, it takes medical heroism and moral courage to be a health care worker at Rosebud. Few better exemplify these virtues than Dr. Clark Marquart, a 35-year-old general practitioner who is the medical director of Indian Health Management, a nonprofit group on the reservation. Were he like many doctors, he would have taken a quick look at the near-hopelessness of the enduring misery among the Sioux and headed for a suburban practice that could double or triple his salary for half the work and a 10th of the frustration.

Marquart somehow slipped through medical school with his beliefs and zeal intact. They have sharpened since. Marquart came to Rosebud in 1974 after an internship in Denver. He stayed for 18 months and then left to serve among the Indians in Washington state. He returned to the Sioux in January 1981.

"I still have bruises from beating my head against the wall the last time I was here," Marquart wrote in a letter to me the other day. "But when I returned to Rosebud two years ago, problems at the IHC hospital were far worse than when I left. The hospital has some excellent doctors and nurses on its staff right now. What the reservation has never seen, however, is a level of medical resources remotely approaching the level of need."

Severe poverty is found on every Indian reservation. The story of Rosebud differs because in addition to the strains of high rates of death and disease there is the psychological torment: Washington--Congress, public health officials, budget makers--is aware of the misery and has said, through the announced plans for a new hospital, that help is on the way. It just hasn't said when. The Sioux dangle.

Indians have always been able to claim, with strong reason, that the white man speaks with a forked tongue. For the Rosebud Sioux, now there is not even double talk. Only silence.