The emergency response to the Swine influenza A-H1N1 outbreak is generating new costs for health departments already hurting from the recession.

The Swine flu outbreak is forcing health departments around the country to increase spending to test for possible new cases and educate people on how to avoid it.

Washington is taking the lead on the response, relying on the lessons learned from other global outbreaks, such as SARS and H5N1, or Avian flu, in Asia.

Serena Vinter is a senior research associate for the Washington-based Trust for America's Health, which advocates better disease prevention. She says so far the U.S. response has been impressive.

"We have seen great coordination between the federal agencies and the state and local health departments. And you can attribute that to the planning that has gone on over the past three and a half years," she said.

Vinter says the Bush administration spent about $7 billion to boost the country's ability to plan and coordinate for emergency health problems.

In spite of the improvements at the federal level, many local health agencies are suffering. The recession has cut crucial flows of tax money to cities and states, forcing them to cut healthcare budgets and lay off employees.

Robert Pestronk is the executive director of the National Association of County and City Health Officials. He says local health departments lost about $300 million in financing and 7,000 workers last year.

"They can't continue to do the things they've always done and then do the special needs that will be placed on them during an epidemic," he said.

Pestronk says local health agencies have made a tremendous effort so far, but he worries what will happen if the flu outbreak gets worse.

The cost of fighting the epidemic could soar if hospitals began to take in influenza patients who needed constant care and monitoring.

For individual patients, health insurers would likely cover the costs for flu testing and hospitalization in serious cases. But researcher Serena Vinter says many Americans have no coverage.

"The big question is, we have 43 million people without health insurance. So who is going to pay for their treatment and their testing?," he said.

Often, federal and state health agencies are left footing the bill when patients are unable to pay for their healthcare.

Tuesday, President Obama asked Congress for $1.5 billion to help fight the flu outbreak, but it is unclear how that money would be allocated.

Robert Pestronk says local health departments should be first in line to get federal aid.

"I'm hopeful that what he is asking for and what Congress will provide are funds that will go directly to local health departments to help shore up their response," he said.

Pestronk says federal money would help defray costs of the flu response, but it will not reverse the economic troubles for many local governments. He estimates local health agencies have accumulated a shortfall of about $30 billion for day-to-day operations.