Exhibit 10.78a


                    MAXICARE HEALTH PLANS, INC.
                      1995 STOCK OPTION PLAN

                       AMENDMENT NUMBER ONE



      WHEREAS, Maxicare Health Plans, Inc. (the "Company") adopted,
and the Company's stockholders approved, the Maxicare Health Plans,
Inc. 1995 Stock Option Plan  (the "Plan"), which Plan was effective
on July 28th, 1995; and

      WHEREAS, pursuant to  Section  9  of  the  Plan, the Board of
Directors of the Company (the  "Board")  has the power to amend the
Plan; and

      WHEREAS, in order to reflect recently enacted changes to Rule
16b-3 promulgated under  the  Securities  Exchange  Act of 1934, as
amended, as well as  finalized  regulations under Section 162(m) of
the Internal Revenue Code of 1986,  as amended, the Board wishes to
amend the Plan in the manner set forth below; and

      WHEREAS, such amendments do  not  require the approval of the
Company's stockholders and will not adversely affect any Optionee's
rights  under  the  Plan  with  respect  to  any  Option heretofore
granted;

      NOW, THEREFORE, the Plan is amended, effective as of the date
of adoption of this amendment, as follows:

      1.   Section 4.1  is  amended  by deleting the first sentence
thereof and replacing the same with the following sentence:

      Subject to Section 4.2,  the  Plan Administrator shall be the
      Board during such periods of time as all members of the Board
      are "outside  directors"  as  defined  in  Treas. Reg. 1.162-
      27(e)(3) ("outside directors").

      2.   Section 4.2 is amended by  deleting the second and third
sentences thereof and  replacing  the  same  with the following two
sentences:

      In the event that the Board includes any person who is not an
      outside director, the Board shall  delegate all of its duties
      as  Plan  Administrator  during  such  period  of  time  to a
      committee selected by the Board  which  shall act as the Plan
      Administrator pursuant to the terms hereof (the "Stock Option
      Committee").  The Stock Option Committee shall consist of not
      fewer than two (2) members of the Board, all of whom shall be
      persons who, in the  opinion  of  counsel to the Company, are
      outside directors  and  "non-employee  directors"  within the
      meaning of Rule 16b-3(b)(3)(i)  promulgated   pursuant to the
      Securities Exchange Act of 1934, as amended.

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      3.   Section 7.2 is amended by  deleting from the end thereof
the words "and for a term in excess of five (5) years".

      4.   Section 7.4 is amended by  deleting the provision in the
second sentence thereof.

      5.   Section 9.3  is  amended  in  its  entirety  to  read as
follows:

      Any amendment to the Plan  which  would  result in any of the
      following changes (except by  operation  of Section 6.2) must
      be approved  by  the  shareholders  of  the  Company:  (i) an
      increase in  the  total  number  of  shares  of  Common Stock
      covered by the Plan; (ii)  a  change  in the class of persons
      eligible to receive Stock Options granted under the Plan; and
      (iii) an extension of the  term  of  the Plan beyond ten (10)
      years after the adoption of the Plan.

      6.   Section 11.2  is  amended  in  its  entirety  to read as
follows:

      Any Share Surrender Withholding  Election shall be subject to
the consent or disapproval of  the Plan Administrator in accordance
with rules established from time to time by the Plan Administrator.

      7.   Section  11.4  is  deleted  in  its  entirety,  and  the
following Sections 11.5  and  11.6  are  accordingly renumbered as,
respectively, Sections 11.4 and 11.5

      IN  WITNESS  WHEREOF,  the   Company   has  caused  its  duly
authorized officer to execute  this  instrument of amendment on the
25th day of October, 1996.


                                     MAXICARE HEALTH PLANS, INC.


                                     By: /s/ Alan  D. Bloom
                                         ------------------


                                     ATTEST:


                                     By: /s/ Richard A. Link
                                         -------------------

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