UPDATE 1-US government to pay for flu vaccine campaign

*US federal government will fully fund H1N1 vaccines

*Vaccines to be offered in autumn

By Maggie Fox, Health and Science Editor

WASHINGTON, July 9 (Reuters) - The U.S. government will fully pay for any autumn vaccination program against the new H1N1 swine flu, Health and Human Services Secretary Kathleen Sebelius said on Thursday.

Although it is not certain Americans will be offered the vaccine, Sebelius said plans were on track for a mid-October vaccination program.

"We have already appropriated about a billion dollars to buy the bulk ingredients," Sebelius told a swine flu "summit" of state and local leaders at the National Institutes of Health.

She said a further $7.5 billion was available from emergency preparedness funds.

"We may end up averting a crisis. That's our hope," Obama told the summit by video link from the G8 meeting of industrial nations in Italy.

Sebelius said HHS would make $350 million available to states by the end of the month to help them get ready. States must apply for grants of the money and explain how it would be spent.

She said it was possible that the federal government would seek reimbursement from private insurers -- which usually pay for vaccinating their patients -- but it was unlikely.

She said states must get ready now for a worst-case scenario with the new flu, which she says has infected at least a million Americans and which the World Health Organization has designated a pandemic. It has killed more than 400 people globally since it emerged in March.

"It is a lot easier to walk back as we learn more, if we learn the flu is not as severe, if it goes away," Sebelius told the meeting.

"What we can't do is wait until October and then suddenly decide that we have a very serious situation on our hands."

NEW FOCUS

Sebelius said it appeared that any vaccination campaign would focus on young adults and older children and older people with underlying health conditions such as asthma and pregnancy, who are more likely to develop severe symptoms from influenza.

But, Sebelius noted, flu viruses are unpredictable. "Prepare to be surprised at every step of the way," she said.