Exhibit 10.79a

                      EMPLOYMENT AGREEMENT


        The Employment Agreement ("Agreement"), dated as of January
1, 1998, is made  by  and  between  Maxicare  Health Plans, Inc., a
Delaware  corporation  (the  "Company"),  and  Warren  D.  Foon, an
individual ("Employee").

                            RECITALS

        This  Agreement  is  made  in  consideration  of Employee's
desire to  enter  the  employ  or  continue  in  the  employ of the
Company, and the Company desires that employee be so employed.
    1.  Definitions.    As  used  in  this Agreement, the following
capitalized  terms  shall  have   the  following  meanings,  unless
otherwise  expressly  provided  or  unless  the  context  otherwise
requires:
             (a)    "Board  of  Directors"   means   the  Board  of
Directors of the Company.
             (b)    "Cause" means,  as  used  with  respect  to the
involuntary termination of Employee:
             (i)    Any breach by Employee of this Agreement;
                    (ii)    The material  or  continuous failure of
Employee to perform his  job  duties to the Company's satisfaction,
whether by reason of his inability, refusal or otherwise;
             (iii)  Employee's  willfully   causing   the  Company,
whether by action or inaction, to violate any state or federal law,
rule or regulation;
             (iv)   The  engaging  by  Employee  in  misconduct  or
inaction detrimental to the Company's business or reputation and/or
which exposes the Company to  liability  based upon the inaction or
action(s) of Employee;
             (v)    The conviction of Employee for a felony or of a
crime involving moral turpitude;
             (vi)   Any act of  dishonesty, misconduct, disloyalty,
fraud,   insubordination   or   misappropriation   of  confidential
information  in  connection  with  Employee's  employment  with the
Company or the satisfaction of his obligations hereunder; or
             (vii)  Any  breach  or   violation  of  the  Company's
Policies and Procedures Manual (the "Policies Manual") as in effect
from time to time which  would  warrant termination pursuant to the
terms of such Policies Manual.
        (c)  "Incapacity" means the  absence  of  the Employee from
his  employment  or  the  inability  of  Employee  to  perform  his
essential job duties with  reasonable accommodations on a full-time
basis by  reason  of  mental  or  physical  illness,  disability or
incapacity for a period of thirty (30) consecutive days.
    2.  Employment, Services  and  Duties.      The  Company hereby
employs Employee as Vice President,  General Manager, or such title
designation as  the  Company,  acting  through  the Company's Chief
Executive  Officer  (the  "CEO")  may  from  time  to  time direct.
Employee shall report to and be supervised by the CEO or such other
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person as the CEO may  designate  (the "Supervisor") and shall have
such duties and responsibilities as the Supervisor may designate.

    3.  Acceptance  of  Employment.       Employee  hereby  accepts
employment and agrees to  devote  his  full time with the Company's
business and shall  not  be  involved  in any activities whatsoever
which interfere with Employee's:  (1)  employment with the Company;
(2) satisfaction of Employee's obligations on behalf of the Company
pursuant to the  terms  of  this  Agreement;  or  (3) activities on
behalf of the Company  in  the  discharge  of his duties during the
Company's business hours.

    4.  Obligation to Other Employers.     Employee represents that
his  employment  with  the  Company  does  not  conflict  with  any
obligations he may have with  former employers or any other persons
or entities.   Employee  specifically  represents  that  he has not
brought to the Company  (and  will  not  bring  to the Company) any
materials or documents of  a  former  employer, or any confidential
information or property of a former employer.

    5.  Compensation.    As  compensation  for  all  services to be
rendered by Employee hereunder, the Company shall pay to Employee a
base salary  at  the  rate  of  $190,000.00  per  annum  (the "Base
Salary"), with such increases  and/or  bonuses as may be determined
from time to  time  by  the  CEO  in  his  sole  discretion and, if
applicable, subject to  the  approval  of  the  Board of Directors.
Said Base Salary shall be  payable  in bi-weekly installments or in
such other installments as the  Company  may  from time to time pay
other similarly situated employees.

    6.  Benefits.   In addition to the compensation provided for in
Section 5 of  this  Agreement,  Employee  shall  have  the right to
participate  in  any  profit-sharing,  pension,  life,  health  and
accident insurance, or other employee benefits presently adopted or
which  hereafter  may  be  adopted  by  the  Company  in  a  manner
comparable to those offered or  available to other employees of the
Company who are similarly situated where such plans or programs are
available to  all  such  similarly  situated  employees pursuant to
their terms.   Nothing  contained  herein,  shall  require that the
Company's  Board  of   Directors   designate   the  Employee  as  a
participant in any new plan or program where the Board, in its sole
discretion, chooses to designate participants or qualifications for
any new or additional  program.    Except  as  set forth above, the
Company reserves  the  right  to  add,  terminate  and/or amend any
existing plans, policies,  programs  and/or arrangements during the
term of  this  Agreement  without  any  obligation  to the Employee
hereunder.

             Employee shall also  be  entitled  to twenty (20) days
annual vacation time, during  which  time  his compensation will be
paid in full.  Unused vacation days at the end of any pay period(s)
may be carried over to  subsequent pay period(s), provided that the
cumulative number of vacation days accruing from and after the date
of this Agreement carried over into any subsequent pay period shall
not exceed twenty (20) days.  Employee shall not accrue additional
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vacation days  during  any  pay  period  once  the  total number of
accumulated vacation days equals twenty  (20) days.  Employee shall
under no circumstances be  entitled  to  cash  in lieu of vacations
days, except in the  event  of Employee's termination of employment
with the Company.

    7.  Expenses.   The  Company  shall  reimburse Employee for all
reasonable travel, hotel, entertainment and other expenses incurred
by Employee in  the  discharge  of  Employee's duties hereunder, in
accordance with Company policy  regarding  same, only after receipt
from  Employee   of   vouchers,   receipts   or   other  reasonable
substantiation of such expenses acceptable to the Company.

    8.  Term of  Employment.      The  term  of  this Agreement and
Employee's employment shall be  for  a  period  of two (2) year(s),
commencing as of  the  date  of  this  Agreement and terminating on
December  31,  1999    (the  "Expiration  Date")  unless  otherwise
extended or sooner terminated  as  provided  for in this Agreement.
Employee's employment with the  Company  pursuant to this Agreement
shall terminate prior to the Expiration Date upon the occurrence of
any of the following events:
        (a)  The death of Employee;
        (b)         Employee voluntarily leaves  the  employ of the
Company;
             (c)    The Incapacity of Employee;
             (d)    The  Company  terminates   this  Agreement  for
Cause;
        (e)  The Company terminates  this  Agreement for any reason
other than set forth in Sections 8(a), 8(c) or 8(d) hereof; or
        (f)  The appointment of a  trustee  for the Company for the
purpose of  liquidating  and  winding  up  the  Company pursuant to
Chapter 7 of the Federal Bankruptcy Code.

        9.   Compensation Upon Termination.      In  the event this
Agreement is terminated pursuant  to  Section  8, the Company shall
pay to Employee his then  current Base Salary, prorated through the
Employee's  last  day   of   employment   with   the  Company  (the
"Termination Date") and  solely  those  additional bonuses that had
been declared or fully earned by Employee prior to such termination
("Earned Bonuses"), but had  not  yet  received Earned Bonuses, and
any accrued  vacation  through  the  Termination  Date  pursuant to
Section 6 (the "Termination Pay").   Except as set forth below, all
employment  compensation  and  benefits   shall  cease  as  of  the
Termination Date.  In addition to the foregoing:
        (a)  In  the  event  that  such  termination  arises  under
Section  8(a),  Employee's  estate  shall  be  entitled  to receive
severance compensation  equal  to  such  amount  of Employee's then
current Base Salary as  would  have  been over an additional thirty
(30) day period;
        (b)  Employee recognizes that this Agreement and Employee's
employment with the Company may  be  terminated  at any time by the
Company prior to the  Expiration  Date  "without cause" and nothing
contained herein shall require that the Company
<PAGE>

continue  to  employ  the   Employee  until  the  Expiration  Date;
notwithstanding the foregoing, if  prior  to the Expiration Date of
this Agreement or  prior  to  its  termination pursuant to Sections
8(a), 8(d) or 8(f)  hereof  or  this,  this Agreement is terminated
pursuant to Section 8(e) above, the Employee shall: (y) receive the
greater of either: (i)  his  then  current  Base Salary through the
Expiration Date of the Agreement or (ii) six (6) months Base Salary
when such payments would  have  otherwise  been paid had Employee's
employment with the Company continued (the "Severance Salary"); and
(z) be entitled to continue  to receive through the Expiration Date
solely the health, dental,  disability  and life insurance benefits
that Employee was receiving or participating in pursuant to Section
6 immediately prior to such termination, as though such termination
had not occurred.    If  the  Company  is  unable  to continue such
benefits, the Company shall  obtain  or  reimburse Employee for all
costs actually incurred  by  the  Employee  to obtain substantially
equivalent benefits  (the  "Severance  Benefits").    The Severance
Benefits shall be provided to Employee  as and when such amounts or
benefits would have been paid  to Employee had such termination not
occurred until the first to occur  of: (1) the Expiration Date, (2)
Employee's Death, or (3) until  such time as Employee obtains other
employment which offers any  of  such  benefits to its employees of
similar stature with the  Employee.    In  the event any comparable
benefit obtained or available to the Employee in his new employment
is less than  such  Severance  Benefits  being provided pursuant to
this Section 9, the Company  will  provide  for or pay the monetary
costs of obtaining  such  additional  benefits necessary to provide
substantially similar overall benefits.    The Severance Salary and
the Severance Benefits are  hereinafter collectively referred to as
the "Severance Compensation".

THE SEVERANCE COMPENSATION IN THIS SUBSECTION 9(b) SHALL BE PAID OR
MADE AVAILABLE TO  EMPLOYEE  AS  LIQUIDATED  DAMAGES FOR ALL CLAIMS
EMPLOYEE WOULD HAVE WITH  RESPECT  TO:  (i) THE TERMINATION OF THIS
AGREEMENT OR  THE  TERMINATION  OF  EMPLOYEE'S  EMPLOYMENT UPON THE
EXPIRATION OF THIS AGREEMENT; (ii) ANY COMPENSATION OR BENEFITS DUE
EMPLOYEE FROM THE COMPANY PURSUANT  TO THIS AGREEMENT AND (iii) THE
INJURY TO EMPLOYEE'S REPUTATION AS  A  RESULT OF ANY TERMINATION OF
THIS AGREEMENT OR TERMINATION OF  EMPLOYMENT UPON THE EXPIRATION OF
THIS AGREEMENT.  IN CONNECTION THEREWITH, THE PARTIES AGREE THAT IT
WOULD BE IMPRACTICAL  AND  EXTREMELY  DIFFICULT  TO  FIX THE ACTUAL
AMOUNT OF SUCH DAMAGES AND CLAIMS DUE EMPLOYEE WITH RESPECT THERETO
AND THAT SUCH SEVERANCE  COMPENSATION  AND/OR TERMINATION PAY SHALL
CONSTITUTE A REALISTIC AND REASONABLE VALUATION OF THE DAMAGES WITH
RESPECT TO EMPLOYEE'S CLAIMS.

               __________                    ____________

        (c)  Except as otherwise  provided  in  Section 9(a) or (b)
above, all other compensation  and  benefits  enjoyed  by or due to
Employee as part of Employee's employment with Employer shall cease
as of the Termination Date; including but not limited to any rights
to  office  or  parking  space,   vacation  or  sick  pay,  use  of
telephones, Xeroxing or Facsimile equipment, secretarial
<PAGE>

assistance, any  unpaid  bonus  (other  than  Earned  Bonuses), all
benefits and/or rights pursuant to Section 6 above and the right to
receive grants of any stock  options which have not previously been
granted  to  employee  or,  except  as  expressly  provided  in any
applicable stock option  agreement  or  plan,  vesting in any stock
options previously granted to Employee  which have not vested as of
the Termination Date.
        (d)  In the event Employee  does  not receive, on or before
the Expiration Date, an  offer  for  a new employment agreement but
nevertheless continues as  an  employee  of  the  Company after the
Expiration Date, Employee shall be  thereafter  deemed to be an "at
will employee" who may be  terminated  by  the Company at any time.
In the event Employee's  employment  with the Company is terminated
while Employee is an "at will employee", Employee shall be entitled
to only those severance benefits,  if  any, which are in accordance
with the Company's then  existing  Policies Manual or other written
personnel policies. Employee  acknowledges  and understands that in
such event, Employee will  no  longer  be entitled to the Severance
Compensation set forth herein.
             (e)    All payments of Severance Compensation shall be
made when such payments would have been made had this Agreement not
been terminated and  all  Severance  Benefits, Severance Salary and
Termination Pay shall  be  paid  or  provided  subject to the usual
withholdings, including state and federal taxes.

    10.      Covenant Not to Compete.
        (a)  Employee covenants and  agrees that, during Employee's
employment with the  Company  pursuant  to this Agreement, Employee
will not,  directly  or  indirectly,  own,  manage,  operate, join,
control or  become  employed  by,  or  render  any  services of any
advisory nature  or  otherwise,  or  participate  in the ownership,
management, operation or  control  of,  any business which competes
with the business of the Company or any of its affiliates.
        (b)  Notwithstanding the foregoing,  Employee  shall not be
prevented from investing his assets in  such form or manner as will
not require any services on  the  part of Employee in the operation
of the affairs of a company in which investments are made, provided
such company  is  not  engaged  in  a  business  competitive to the
Company, or if it is in  competition with the Company, provided its
stock is publicly traded  and  Employee  owns less than one percent
(1%) of the outstanding stock of that company.

        11.  Confidentiality.   Employee  covenants and agrees that
he will not at  any  time  during  or  after the termination of his
employment by the  Company  reveal,  divulge  or  make known to any
person, firm or corporation any information, knowledge or data of a
proprietary nature relating to the  business  of the Company or any
of its affiliates which is not or has not become generally known or
public.  Employee  shall  hold,  in  a  fiduciary capacity, for the
benefit of the Company,  all  information,  knowledge  or data of a
proprietary nature, relating to  or concerned with, the operations,
customers, developments, sales, business and affairs of the Company
and its affiliates which is not generally known to the public and
<PAGE>

which is or was obtained  by  the Employee during his employment by
the Company.  Employee  recognizes  and  acknowledges that all such
information, knowledge or data  is  a  valuable and unique asset of
the Company, and accordingly  he  will  not  discuss or divulge any
such  information,  knowledge   or   data   to  any  person,  firm,
partnership, corporation or organization other than to the Company,
its affiliates, designees, assignees or successors or except as may
otherwise be required by the  law,  as  ordered by a court or other
governmental body of competent  jurisdiction, or in connection with
the business and affairs of the Company.

    12. Equitable  Remedies.      In  the  event  of  a  breach  or
threatened breach  by  Employee  of  any  of  his obligations under
Sections 10 and 11  of  this  Agreement, Employee acknowledges that
the Company may not have an adequate remedy at law and therefore it
is mutually  agreed  between  Employee  and  the  Company  that, in
addition to any  other  remedies  at  law  or  in  equity which the
Company may have, the Company shall  be entitled to seek in a court
of  law  and/or  equity  a  temporary  and/or  permanent injunction
restraining Employee from  any  continuing  violation  or breach of
this Agreement.

        13.  Miscellaneous.
        (a)  This Agreement shall be binding  upon and inure to the
benefit of the Company and any successor of the Company.  Except as
set forth  in  Section  8(f)  above,  this  Agreement  shall not be
terminated by  the  voluntary  or  involuntary  dissolution  of the
Company or by any  merger,  reorganization  or other transaction in
which the Company is not  the surviving or resulting corporation or
upon any transfer of all or  substantially all of the assets of the
Company in the event  of  any  such  merger, or transfer of assets.
The provisions of this  Agreement  shall  be binding upon and shall
inure to  the  benefit  of  the  surviving  business  entity or the
business entity to which  such  assets  shall be transferred in the
same manner and  to  the  same  extent  that  the  Company would be
required to perform it if no such transaction had taken place.

        Neither this Agreement nor any rights arising hereunder may
be assigned or pledged by Employee.
        (b)  Except  as  otherwise  provided  by  law  or elsewhere
herein, in the event  of  an  act  of force majeure, as hereinafter
defined, during the term hereof  which event continues for a period
of no less than fifteen (15) days, the Company shall be entitled to
suspend this Agreement  for  the  duration  of  such event of force
majeure.  In such event, during  the duration of the event of force
majeure the Company shall  be  relieved  of  its obligations to the
Employee pursuant to Sections 5  and 6; except for the continuation
of any health,  life  or  disability  insurance  coverage.  For the
purposes hereof, "force majeure" shall be defined as the occurrence
of one or more of the following events:
        (i)  any act commonly  understood  to  be  of force majeure
which materially and adversely  affects  the Company's business and
operations,  including  but  not  limited  to,  the  Company having
sustained a material loss,  whether  or  not  insured, by reason of
fire, earthquake, flood, epidemic, explosion, accident, calamity or
other act of God;
             (ii)   any  strike  or  labor   dispute  or  court  or
government action, order or decree;
<PAGE>

             (iii)  a banking  moratorium  having  been declared by
federal or state
             (iv)   an outbreak of  major armed conflict, blockade,
embargo, or other international hostilities or restraints or orders
of civic, civil defense, or  military authorities or other national
or international calamity having occurred;
             (v)    any  act  of   public   enemy,  riot  or  civil
disturbance or threat thereof; or
                    (vi)    a  pending   or   threatened  legal  or
governmental  proceeding  or  action   relating  generally  to  the
Company's business, or a  notification  having been received by the
Company of the threat of any such proceeding or action, which could
materially adversely affect the Company.
             (c)    Except  as  expressly   provided  herein,  this
Agreement contains  the  entire  understanding  between the parties
with respect to the subject matter hereof, and may not be modified,
altered or amended except by an instrument in writing signed by the
parties hereto. This Agreement  supersedes  all prior agreements of
the parties with respect to the subject matter hereof.
        (d)  This Agreement shall  be  construed in accordance with
the laws of the State of California applicable to agreements wholly
made and to be  performed  entirely  within  such state and without
regard to the conflict of law principles thereof.
        (e)         Nothing  in  this   Agreement  is  intended  to
require or shall be  construed  as  requiring  the Company to do or
fail to do any act  in  violation  of applicable law. The Company's
inability pursuant to court order  to perform its obligations under
this Agreement shall not constitute a breach of this Agreement.  If
any provision of this  Agreement  is  invalid or unenforceable, the
remainder of this Agreement shall nevertheless remain in full force
and effect.  If any provision is held invalid or unenforceable with
respect to particular circumstances, it shall, nevertheless, remain
in full force and effect in all other circumstances.
        (f)         With the exception  of  the  Company's right to
enforce the provisions found in Sections 10 or 11 of this Agreement
pursuant to Section 12  hereof,  any  and all disputes arising from
Employee's  employment  with   or   termination  from  the  Company
including but not limited  to  any  claim for unlawful retaliation,
wrongful termination of employment,  violation  of public policy or
unlawful discrimination or harassment  because of race, color, sex,
national origin, religion,  age,  physical  or mental disability or
condition, marital  status,  sexual  orientation  or  other legally
protected characteristic shall  be  resolved  by  final and binding
arbitration  before  a  single  arbitrator.    EXCEPT  AS OTHERWISE
PROVIDED IN THIS SECTION, THE  PARTIES  AGREE  THAT IF A DISPUTE OR
CLAIM OF ANY KIND  ARISES  BETWEEN  THEM,  THEY  AGREE TO WAIVE ANY
RIGHTS EACH MAY HAVE TO A JURY OR COURT TRIAL.

              Any party hereto electing to commence an action shall
give written notice to the  other  parties hereto of such election.
The arbitrator shall be limited to an award of monetary damages and
shall conduct the  arbitration  in  accordance  with the California
Rules of Evidence. The dispute  shall  be settled by arbitration to
take place in Los  Angeles  County,  California, in accordance with
the then rules of the American Arbitration Association or its
<PAGE>

successor.   The  award  of  such  arbitrator  may  be confirmed or
enforced in any  court  of  competent  jurisdiction.  The costs and
expenses of the arbitrator including  the attorney's fees and costs
of each of the parties, shall be apportioned between the parties by
such arbitrator based upon  such  arbitrator's determination of the
merits of their respective  positions.    Nothing contained in this
Section  shall  in  any  way  be  construed  to  modify,  expand or
otherwise alter  the  rights  and  obligations  of  the Company and
Employee contained elsewhere in this Agreement.
        (g)         Any notice to the Company required or permitted
hereunder  shall  be  given  in  writing  to  the  Company,  either
personally, by messenger,  courier  or otherwise, telex, telecopier
or, if by mail,  by  registered  or  certified mail, return receipt
requested, postage prepaid, duly addressed  to the Secretary of the
Company at its then principal place of business. Any such notice to
Employee shall be given to  the  Employee  in a like manner, and if
mailed shall be addressed  to  Employee  at Employee's home address
then shown in  the  files  of  the  Company.    For  the purpose of
determining compliance with any  time  limit herein, a notice shall
be deemed given on the fifth  day following the postmarked date, if
mailed, or the date of  delivery  if delivered personally, by telex
or telecopier.
             (h)    Employee acknowledges  that:  (i)  he  has been
advised by the Company that this Agreement affects his legal rights
and to seek the advice of  his  legal counsel prior to executing it
and (ii) has had  the  opportunity  to  consult  with his own legal
counsel in connection with  the  negotiations  of the terms of this
Agreement, his rights with respect hereto and the execution hereof.
             (i)    A  waiver  by  either  party  of  any  term  or
condition of this  Agreement  or  any  breach  thereof,  in any one
instance, shall not be deemed or  construed  to be a waiver of such
term or condition or of any subsequent breach thereof.
             (j)    The section  and  subsection headings contained
in this Agreement  are  solely  for  convenience  and  shall not be
considered in its interpretation.
             (k)    This Agreement may be  executed  in one or more
counterparts, each of which shall constitute an original.
<PAGE>


    IN WITNESS  WHEREOF,  the  parties  hereto  have  executed this
Agreement as of the day and year first written above.

                            COMPANY:

                               MAXICARE HEALTH PLANS, INC.
                               a Delaware corporation


                               By: ________________________
                                   Peter J. Ratican
                                   Chairman, President and
                                   Chief Executive Officer


                               By: _________________________
                                   Alan D. Bloom, Secretary


                            EMPLOYEE:


                               By: ___________________________
                                   Warren D. Foon