Former healthcare workers at Steward Health Care are facing a waking nightmare as the sudden collapse of their malpractice insurer, TRACO, threatens to plunge them into financial ruin. Once hailed as heroes by Massachusetts officials for keeping hospitals running amidst systemic chaos, these doctors and nurses now find themselves abandoned and legally exposed. Many are raiding their life savings and retirement funds to cover basic insurance costs, while others are being targeted by malpractice attorneys seeking settlements that TRACO previously promised to pay but failed to honor.
For surgeons like Dr. Paresh Mane, the situation feels like a calculated betrayal. He and hundreds of his colleagues continued to work in facilities stripped of essential resources, believing their professional liability was secure based on explicit assurances from Steward executives. Now, those same clinicians are left holding the bag for an insurer that was effectively looted by leadership before being shifted to Panama to evade strict regulatory oversight. This move created a jurisdictional blind spot, leaving state regulators powerless to monitor the company’s solvency or protect the people relying on it.
In response to this crisis, a coalition of over 300 medical professionals has joined forces with the Massachusetts Medical Society to demand urgent intervention from Governor Maura Healey’s administration. They are calling for a government backstop for malpractice coverage and a full criminal investigation into the former executives who allegedly misled staff while enriching themselves through private equity deals. The stakes extend beyond the providers; patients injured by substandard care under Steward’s management may also find there is no money left to compensate them for their suffering.
While the governor’s office says it is reviewing proposals and has urged bankruptcy courts to intervene, critics argue that the damage is already done. Legal experts suggest that recovering funds from an entity operating in Panama with virtually no remaining capital is nearly impossible. For the frontline staff who stayed behind when things got difficult, the reward for their loyalty has been a devastating loss of financial security and a haunting sense of vulnerability in their professional lives.
