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Gov. Scott Walker is accepting nearly $38 million from the federal health care reform law to create a health care exchange, even though he has said he opposes the law and the exchanges it requires states to set up.

"The delivery of affordable, quality health care is a high priority," Andrew Hitt, deputy legal counsel for Walker, wrote in a letter accepting the grant, announced Wednesday by the U.S. Department of Health and Human Services.

The $37.8 million award, one of seven "early innovator" grants to states, will help Wisconsin set up a marketplace for people to buy insurance. Nearly 1 million residents are expected to purchase insurance through the online exchange. Many are on Medicaid, the state-federal health plan for the poor, and some others will get government subsidies to pay premiums.

Under the health reform law passed last year, states must create the exchanges by 2014 or the federal government will step in and do so.

When Walker announced his Office of Free Market Health Care last month, a news release said the office will "explore all opportunities and alternative approaches that would free Wisconsin from establishing a health benefit exchange, including federal waivers."

A statement from the free market health are office Wednesday said, "Receipt of the early innovators grant does not commit Wisconsin to a specific approach to exchange development. Wisconsin will maintain the ability to create an exchange that is consistent with a free market approach."

Walker and 20 other Republican governors wrote in a letter last week to Kathleen Sebelius, health and human services secretary, that health reform "threatens to destroy our budgets." They called for "complete flexibility on operating the exchange."

Sebelius responded that states have "substantial flexibility to establish exchanges," including offering health savings accounts, which Walker and most Republicans support.

Walker authorized Attorney General J.B. Van Hollen last month to join 25 states in a lawsuit opposing the health reform law. A federal judge in Florida recently ruled in the case that the law is unconstitutional because it requires most Americans to buy insurance or face penalties.

Another federal judge has deemed part of the law unconstitutional, while two others have found it constitutional. The issue is expected to be decided by the U.S. Supreme Court.

Last week, Ted Nickel, Walker's Commissioner of Insurance, terminated a $637,114 grant issued through the health reform law to help people enroll in health coverage and file complaints.

Nickels called the program "largely duplicative and unnecessary" and said "saving taxpayers, whether they are federal or state taxpayers, from unnecessary spending is in everyone's best interest."