The US Commerce Department has canceled all Medicare and Medicaid funding for a proposed merger between JPMorgan Chase & Co. and the U.S. Securities and Exchange Commission.
The Commerce Department said Thursday that the two companies had made “unacceptable” financial and operational decisions that had a “material adverse effect” on the nation’s health care system and the economy.
“We are canceling the funds to implement this merger, and we are withdrawing from any future discussions with these entities,” Commerce Secretary Mike DeWine said in a statement.
DeWine added that JPMorgan would now work with state Medicaid systems and states to ensure the merger does not cause further disruption to the health care delivery system.
DePauw University’s Joseph Hausfrem is among a group of experts who have argued that merging JPMorgan and its insurance unit, AIG, would not be the best course of action.
Hausfem, an expert on mergers and acquisitions, wrote in an op-ed in The Wall Street Journal that the merger would be bad for the country, as the merged entity would not have to disclose all of the financial information that the merged company would provide.
In January, President Trump said that he would block the merger unless the banks were “accountable” to him.
If the merger goes through, it will likely bring back billions of dollars in the Treasury that were used to finance the government shutdown and to fund the American Health Care Act, which is currently in Congress.
As The Wall St. Journal reports, The companies would combine JPMorgan Chase’s financial services unit, JPMorgan Insurance, with AIG’s insurance division, AIC.
JPMorgan would own the health insurance and finance unit while AIG would own AIG-owned insurance.
According to the WSJ, the merger is expected to close in 2018, and a final decision will be made in 2021. (H/T CNBC)