WASHINGTON (AP) -- State health officials said Wednesday that concerns over compensation for people injured by the smallpox vaccine are hampering the inoculation program, which has vaccinated just a few hundred people so far.

Federal authorities acknowledge the problem but still have no solution.

Based on historic data, a small number of people vaccinated will face serious injuries, and federal officials acknowledge they need a way to offer compensation for lost wages and medical expenses. But officials made clear they still lack a plan even as states are beginning to inoculate smallpox response teams.

The only way people now can get reimbursed for expenses is through the workers' compensation system, which federal officials say has many holes.

"We're stepping up to the front lines to protect the public health. We expect the federal government to come in there and support us," said Dr. Leah Devlin, state medical director in North Carolina.

New York City plans to delay its program for months, partly due to concerns about compensation, a federal official said.

Nebraska initially aimed to inoculate 3,000 people in the first phase, but officials are now expecting a total closer to 1,700, said Dr. Richard Raymond, the state's chief medical officer. The difference is partly due to concerns about compensation, he said.

In Virginia, many hospitals are skeptical about the smallpox program to start with, and the lack of compensation has made the problem worse, said Lisa Kaplowitz, deputy commissioner for emergency preparedness and response at the state's Health Department.

While smallpox was eradicated more than two decades ago, and the last U.S. case was in 1949, experts fear it could be released again in an act of bioterrorism.

To prepare for a potential attack, federal officials had hoped states would vaccinate up to 500,000 people on smallpox response teams and in hospital emergency rooms during the first phase of a preparation program. In the second phase, they hope states will inoculate up to 10 million other people, including more health care workers and emergency responders.

States have expressed a variety of concerns since President Bush announced this policy in December. Many officials worry they do not have enough money to run their vaccination programs. Some say they are still not convinced that the risk of smallpox is great enough to risk the vaccine.

"What if the federal government threw a vaccine party and nobody came?" David Engelthaler, chief of the Arizona Department of Health Services bioterrorism office, asked at a National Governors Association bioterrorism session.

So far, 11 states and one city have vaccinated 432 people, said Joe Henderson, bioterrorism chief at the Centers for Disease Control and Prevention. Forty-three states and large cities have requested 368,700 doses of vaccine, and 221,700 doses have been shipped so far, he said.

Henderson acknowledged that the compensation issue was causing significant concerns, but he tried to play down expectations for the program.

"We feel it would be a success if no one received the vaccine but we offered this opportunity to all the right people," he said.

Because the vaccine can cause serious injuries, Congress barred most lawsuits against hospitals and others administering the shots. That left people who are injured with little opportunity for compensation.

People who get inoculated because of their jobs may be eligible for workers' compensation. But in most states, injured workers are not reimbursed their full wages. In New York state, for instance, the maximum compensation is two-thirds of their salaries, up to $400 per week.

In North Carolina, some hospitals underwrite their own workers' compensation programs, meaning they will bear the cost of any claims.

In Nebraska, state employees and workers at large hospitals are covered by workers' compensation. But most small, rural hospitals are covered by one plan that has said that it will not cover smallpox vaccine injuries.

Federal officials agree that the issue must be resolved, but they have yet to say how. One possibility is creating a compensation fund modeled after one that helps people injured by other vaccines.

Health officials are working on cost estimates for a compensation fund, Henderson said. "It's challenging because this is very much a political issue."

Copyright 2003 The Associated Press. All rights reserved.