Christian medical cost-sharing ministry accused of stealing $4 million from members

A St. Joseph, Missouri-based Christian, nonprofit medical cost-sharing "ministry" called Medical Cost Sharing, Inc. (MCS) has been accused of fleecing its members and has been ordered to stop bringing in new clients. News Press NOW reports:

A St. Joseph company was ordered to stop accepting new clients after a federal complaint alleged that its leadership used customer funds for personal gain instead of covering medical expenses.

Medical Cost Sharing and its two founders, Craig A. Reynolds and James L. McGinnis, are accused in federal court documents of using a fraction of $7.5 million in membership contributions to cover health care expenses. Instead, a complaint filed in U.S. District Court alleges that the two men placed at least $4 million into their own bank accounts.

U.S. District Judge Greg Kays issued a preliminary injunction on Jan. 5 that requires Medical Cost Sharing, or MCS, to disable its website domain name. In addition, MCS is prohibited from destroying records and cashing checks or depositing contributions from its members/customers.

Neither the company nor the two founders, both from St. Joseph, are charged with any kind of crime. The U.S. Attorney's Office filed a civil complaint in late December that outlined what it saw as probable cause that federal wire fraud statutes were violated.

I looked up Craig Reynolds and James McGinnis and found their LinkedIn pages. McGinnis' didn't have much info, but Reynolds' says:

My goal is to provide affordable health care to all Christians without the bureaucracy involved in ObamaCare and without the concern of profits that all "for profit" companies that have to answer to their stockholders need to go through. As a 501C3 non profit company, we can do that.

Oh, the hypocrisy! This is coming from a man who is being accused of stealing four million dollars from MCS members who paid into the company thinking they would be getting health insurance. Many were left with thousands of dollars of unpaid medical bills. Forbes further explains:

Members of the Medical Cost Sharing (MCS) ministry had been promised their medical bills would be covered in return for a monthly contribution. Those membership fees were to be "shared" with a network of "like-minded" Christians, in what appeared to be a legitimate faith-based nonprofit, effectively crowdfunding insurance and charitably disbursing money when claimants required aid. But clients claimed they were denied coverage for reasons they couldn't grasp and left with thousands in unpaid medical bills, according to an FBI search warrant. The feds claim it was part of a fraud, one that saw the business owners—Missouri-based Craig Reynolds and James McGinnis—pocket $4 million of $7.5 million in membership payments, of which only $250,000 (3.2%) went on medical expenses. The feds say the organization has become even stingier in recent years, distributing no money whatsoever to members since 2021.

Lots of these companies exist—I just did a quick Google search and dozens appeared. Unfortunately, they are often confusing at best and unethical and fraudulent at worst, and what's even worse is that they aren't subject to much oversight. Again, Forbes:

While such nonprofits claim to offer legitimate insurance alternatives, there's no real oversight of their operations, said JoAnn Volk, research professor at the Center on Health Insurance Reforms at Georgetown University. "Healthcare sharing ministries claim an exemption from federal and state insurance laws, so there's no guarantee that the organization maintains funds sufficient to pay claims and certainly no guarantee that they will, even if the funds are there," Volk told Forbes. "There are no solvency requirements, no requirement to pay members in a timely way – no requirement to pay at all. It really is just a matter of faith that claims will be paid, though the marketing typically suggests otherwise."

For more about this shady industry, read the rest of the Forbes article here, and check out this piece from 2020 from the New York Times.