Exhibit 10.4h


            AMENDMENT NO. 1 TO THE AMENDED AND RESTATED

             EMPLOYMENT AND INDEMNIFICATION AGREEMENT


      This Amendment No. 1  to  the Amended and Restated Employment
and Indemnification Agreement ("Agreement"),  dated  as of April 1,
1996, is  made  by  and  between  MAXICARE  HEALTH  PLANS,  INC., a
Delaware corporation (the  "Company"),  and  Eugene L. Froelich, an
individual ("Executive") and is dated as of February 11, 1997.


                          R E C I T A L S


      WHEREAS,  Executive  presently   serves   as  Executive  Vice
President - Finance and  Administration and Chief Financial Officer
of the Company  pursuant  to  the  Agreement, exerting particularly
diligent efforts in such capacities on behalf of the Company;

      WHEREAS, the Company and  the  Executive have agreed to amend
the Agreement to modify the terms of "Exhibit C-1" thereto relating
to the Executive's "Performance Bonus"  as  such term is defined in
Section 4(c) of the Agreement; and

      NOW, THEREFORE, in consideration  of the terms and conditions
hereinafter set forth, the Company and Executive agree as follows:

      1.   Section 4(c) of the Agreement is amended to provide that
all  references  to  Exhibit  C-1  of  the  Agreement  entitled the
"Performance Bonus" are hereby deemed  to refer to the "Amended and
Restated Performance Bonus" attached hereto  and made a part hereof
as "Exhibit A".

      2.   Except as expressly set  forth  herein, all of the terms
and conditions contained  in  the  Agreement  shall  remain in full
force and effect.

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      IN WITNESS WHEREOF, this Amendment  No.1 to the Agreement has
been executed as of the date first above written


                                     MAXICARE HEALTH PLANS, INC.


                                     /s/ ALAN BLOOM
                                     --------------
                                         Alan Bloom



                                     EXECUTIVE

                                     /s/ EUGENE L. FROELICH
                                     -------------------------
                                         Eugene L. Froelich
                                      Executive Vice President
                                       Chief Financial Officer

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                             EXHIBIT A

              Amended and Restated Performance Bonus


      Executive's (hereinafter either Peter J. Ratican or Eugene L.
Froelich as the case may  be)  annual Performance Bonus pursuant to
Section 4(b) of the Amendment No. 1, dated as of February 11, 1997,
to  the  Amended   and   Restated  Employment  and  Indemnification
Agreement dated as of  April  6,  1996  between the Company and the
Executive  (the  "Amended  Agreement")  shall  be  based  upon  the
Company's annual Pre-Tax Earnings  during  the  term of the Amended
Agreement computed in accordance with generally accepted accounting
principles pursuant to the following:

      1.   The first  year  (the  fiscal  year)  shall  commence on
January 1, 1997 and each  subsequent fiscal year on the anniversary
date of the first year.

      2.   "Pre-Tax Earnings" shall not include any items of either
extraordinary income or extraordinary expense, as determined by the
Company's independent auditors.

      3.   "The Company,"  for  the  purposes  of  this bonus shall
include Maxicare Health  Plans,  Inc.  and  all of its subsidiaries
(whose financial  statements  are  consolidated  with  those of the
Company's),  successors  and   assigns   whether  now  existing  or
hereinafter created or acquired.   In  the  event the Company, or a
substantial portion thereof,  is  acquired  by an unrelated entity,
whether by a  stock  acquisition,  purchase  of assets or otherwise
during the term of  the  Agreement,  a good-faith allocation of the
Pre-Tax Earnings of the  Company  during  the applicable period for
the purposes  of  this  bonus  shall  be  made  by  the Company and
reviewed by the independent auditors for the Company.  The Company,
and any successor, shall keep its records in such a manner that the
auditors will have the requisite  information  to be able to review
such allocation.

      4.   For any fiscal year, the  Performance Bonus will only be
granted if the Pre-Tax Earnings for such year exceeds $10,000,000.

      5.   Executive will be entitled  to the following percentages
of the excess of Pre-Tax Earnings over $10,000,000:


           (a)   2% of that portion  of  the Pre-Tax Earnings which
                 exceeds  $10,000,000  by  $5,000,000  or  less  (a
                 maximum bonus of $100,000); plus

           (b)   2-1/2% of  that  portion  of  the Pre-Tax Earnings
                 which exceeds  $15,000,000  but  not  in excess of
                 $20,000,000 of Pre-Tax  Earnings  (a maximum bonus
                 of $125,000); plus

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           (c)   3% of that portion  of  the Pre-Tax Earnings which
                 exceeds $20,000,000.

      6.   The  aggregate  amount  of   the  Performance  Bonus  to
Executive shall not exceed $2,000,000 for any fiscal year.


Dated: February 11, 1997

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