Exhibit 10.4i

                              RELEASE 


        This Release (this "Release") is entered into this 22nd day
of January, 1998 (the "Execution Date"), by Eugene L. Froelich
("Employee") located at 14152 Valley Vista Boulevard, Sherman Oaks,
CA 91423  and delivered to and for the benefit of Maxicare Health
Plans, Inc., a Delaware corporation, located at 1149 South Broadway
Street, Suite 910, Los Angeles, CA 90015 ("Maxicare").

        WHEREAS, Employee was employed as Executive Vice President -
Finance and Administration and Chief Financial Officer of Maxicare
pursuant to the terms of that certain Amended and Restated Employment
and Indemnification Agreement dated as of April 1, 1996, as amended
by Amendment No. 1 thereto, dated February 11, 1997, by and between
Maxicare and Employee (the "Employment Agreement");  

        WHEREAS, Maxicare terminated Employee's employment "without
cause" pursuant to Section 7(e) of the Employment Agreement on
December 11, 1997 (the "Termination Date");

        WHEREAS, pursuant to the terms of the Employment Agreement,
in the event of a termination pursuant to Section 7(e), Employee is
entitled to receive certain severance benefits as set forth in
Section 8 (a)(iv) of the Employment Agreement as follows:

                         "(iv)    If the termination arises under
Section 7(e){"without cause"} or under Section 7(b) for Good Reason,
then as soon as practicable, but in no event later than thirty (30)
days of the date of such termination, an amount equal to the balance
of Executive's then annual Base Salary which would have been paid
over the remainder of the term of this Agreement pursuant to Section
4(a) hereof.  Additionally, Executive shall (1) receive all
compensation and benefits which would have been due Executive under
Section 4(b) hereof over the remainder of the term of this Agreement,
(2) immediately receive all compensation described in Section 8(c)
hereof, (3) immediately be vested in all stock options or Restricted
Stock not otherwise already vested, and (4) continue to receive all
benefits described in Section 5 hereof, for the period between the
termination date and March 31, 2001, and the monetary value of any
such additional amounts or benefits shall be paid or provided to
Executive as and when such amounts or benefits would have been paid
to Executive had such termination not occurred." 

<PAGE>






        The lump sum payments due pursuant to Sections 8(a)(iv) and
8(c) of the Employment Agreement hereinafter collectively referred to
as the "Lump Sum Severance Payments";

        WHEREAS, Employee has requested and Maxicare has agreed to
pay to Employee in a lump sum along with the Lump Sum Severance
Payments certain additional severance payments, benefits and amounts
which would or may become due under the Employment Agreement (the
"Additional Lump Sum Payment"), which Lump Sum Severance Payments and
Additional Lump Sum Payment, except as expressly set forth herein,
will be in full satisfaction of all claims that Employee has or may
hereinafter acquire in connection with the Employment Agreement and
Employee's services rendered on behalf of Maxicare;    

        WHEREAS, in connection with the termination of Employee's
employment with Maxicare, Employee has agreed to resign as a Director
of Maxicare, effective as of the Effective Date, as hereinafter
defined, of this Release;  

        WHEREAS, Section 8(b) of the Employment Agreement provides
that prior to any payment by Maxicare to Employee pursuant to Section
8(a)(iv), Employee shall execute and deliver a release to Maxicare;
and 

        WHEREAS, this Release in being executed and delivered to
Maxicare in satisfaction of the requirements of Section 8(b) of the
Employment Agreement.

        NOW, THEREFORE, in consideration of the promises and releases
given herein, the parties hereby agree as follows:

        1.      Capitalized Terms.  Except as expressly defined
herein, capitalized terms shall have the meanings ascribed to them in
the Employment Agreement.

        2.      Effectiveness of this Release.   This Release shall
be deemed effective and shall be enforceable solely upon the
occurrence of both of the following time periods which shall run
consecutively: (i) the Release Review Period which shall be deemed to
be a period consisting of either: (y) twenty-one (21) days following
the date of delivery of this Release to the Employee, which Employee
acknowledges to be December 11, 1997 (the "Release Delivery Date") or
(z) such lesser period as the Employee may agree to in writing and
(ii) the Release Revocation Period which shall be deemed to be  a
period consisting of seven (7) days following the Execution Date of
this Release by the Employee. During the Release Revocation Period
Employee may
<PAGE>
 revoke and rescind this Release at any time by delivering written





notice thereof to Maxicare.  The Release Revocation Period shall
terminate at 12:01 a.m., Los Angeles time on the eighth (8th) day
following the commencement date thereof (the "Effective Date").  

        3.      Payments to Executive and Severance Benefits.
Employee acknowledges receipt of  payment in full by Maxicare of all
salary, wages, vacation pay or other compensation and benefits due,
accrued and unpaid through the Termination Date, including
reimbursable expenses incurred through and including the Termination
Date ("Accrued Termination Date Compensation"), subject to and
conditioned upon the occurrence of the Effective Date, Maxicare
agrees to provide severance benefits to Employee as set forth in
subsections 3(a) through 3(e) below (the "Severance Benefits") as
follows:

                (a)      subject to withholding taxes pursuant to
Section 8 below, all Lump Sum Severance Payments, as required by
Section 8(a)(iv) of the Employment Agreement, in the gross aggregate
amount of $1,720,500 shall be paid to Employee on the Effective Date; 

                (b)      subject to Section 8 below, the Additional
Lump Sum Payment, in the aggregate  amount of $479,500, shall be paid
to Employee on the Effective Date ( the Lump Sum Severance Payments
and the Additional Lump Sum Payment hereinafter referred to as the
"Release Date Payments"); 

                (c)      all 65,000 shares of Restricted Stock shall
immediately vest on the Termination Date.  Maxicare shall deliver
32,272 of such shares to Employee on the Effective Date (the
"Remaining Restricted Shares") and shall repurchase 32,728 shares
from the Employee, and pay withholding taxes, in accordance with the
terms of the Restricted Stock Grant Agreement between Maxicare and
the Employee;

                (d)      all outstanding stock options held by
Employee on the Termination Date shall remain immediately exercisable
and shall terminate in accordance with their respective terms; and 

                (e)      all benefits due or which may become due
Employee pursuant to the terms of the Maxicare Health Plans, Inc.
Supplemental Executive Retirement Plan effective January 1, 1997
("SERP"), calculated as set forth in Exhibit "A" attached hereto and
made a part hereof; and 

        Except as otherwise provided above or in Section 9 below, all
other compensation and benefits enjoyed by or due to Employee

<PAGE>
 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 assistance, any Performance Bonus
pursuant to Section 4(b) of the Employment Agreement, all benefits
and/or rights pursuant to Section 5 of the Employment Agreement and
additional Stock Options grants after the Termination Date pursuant
to Section 4(c) of the Employment Agreement. Employee further
acknowledges and agrees that: (i) pursuant to Section 4(c) of the
Employment Agreement, Employee shall not be entitled to receive any
additional stock option grants and (ii) Employee has been reimbursed
in full by Maxicare for all reimbursable expenses that Executive
would be entitled to reimbursement for pursuant to Section 6 of the
Employment Agreement or otherwise.

        4.      Release of Maxicare Released Parties.   Subject to
and conditioned upon the occurrence of the Effective Date and
Maxicare's payment to Employee of the Release Date Payments, payment
of withholding taxes pursuant to Sections 8 and 3(c) above, and the
delivery of the Remaining Restricted Shares as set forth in Section 3
above, Employee, on his own behalf and on behalf of his agents,
attorneys, representatives, assigns, transferees, predecessors in
interest, successors in interest, joint venturers, partners,
employees, officers, directors, heirs, legatees, executors,
administrators, and servants (all of which for convenience are
hereinafter referred to as the "Employee Releasing Parties"), hereby
releases and absolutely and forever discharges Maxicare, its agents,
attorneys representatives, assigns, transferees, predecessors in
interest, successors in interest, affiliates, subsidiaries, joint
venturers, partners, and their respective employees, officers,
directors, heirs, legatees, executors, administrators, and servants
(all of which for convenience are hereinafter referred to as
"Maxicare Released Parties"), from, and shall indemnify and hold
Maxicare and the Maxicare Released Parties harmless from and against,
any and all rights, claims, demands, damages, debts, liabilities,
accounts, obligations, reckonings, liens, attorney's fees, costs,
expenses, actions and causes of action of every kind and nature
whatsoever, whether now known or unknown, suspected or unsuspected,
based upon statute, common law or otherwise, which Employee and/or
any of the Employee Releasing Parties has, own or hold, or at any
time heretofore ever had, owned or held, or may hereafter have, own
or hold based upon or related to any fact, thing, act, event,
happening, inaction or omission occurring or existing at any time up
to, including and following the date of this Release (collectively
"Claims"), arising out of or in connection with any compensation or
benefit of any nature whatsoever which may be due Employee or which
may become due Employee as a result of Employee's employment by

<PAGE>
 Maxicare or any of the Maxicare Released Parties, and the





termination thereof; including but not limited to: any Accrued
Termination Date Compensation, Severance Benefits, other compensation
or benefits due to Employee pursuant to Sections 4, 5, 6, 8, 9 and
16(except as set forth in Section 9 below) and 18(f) of the
Employment Agreement, including but not limited to all Claims,
compensation and/or benefits arising out of or relating to the
Employment Agreement or the termination thereof (all of which for
convenience are hereinafter referred to as the "Released Matters"). 

        5.      Applicability of California Civil Code Section 1542.
Employee Releasing Parties waive and relinquish all rights and
benefits afforded by Section 1542 of the Civil Code of State of
California with respect to the Released Matters.  Employee Releasing
Parties understand that the facts with respect to the releases
contained in this Release may hereinafter turn out to be other than
or different from the facts in that connection now known or believed
by Employee Releasing Parties to be true; and Employee Releasing
Parties hereby accepts and assumes the risk of the facts turning out
to be different and agrees that this Release shall be and remain in
all respects effective and not subject to termination or rescission
by virtue of any such difference in facts.

                Section 1542 of the Civil Code of the State of
California reads as follows:

                "A general release does not extend
                to claims which the creditor does 
                not know or suspect to exist in 
                his favor at the time of executing
                the release, which if known by him
                must have materially affected his 
                settlement with the debtor."

        6.      Releases Contained Herein Irrevocable; Covenant Not
to Sue. Upon the effectiveness of this Release as set forth in
Section 4 above, the Releases contained herein shall become
irrevocable with respect to the Maxicare Released Parties as to the
Released Matters. Furthermore, the Employee Releasing Parties hereby
covenant and agree that they will forever refrain and forebear from
commencing, instituting or prosecuting any lawsuit, action or other
proceeding against the Maxicare Released Parties based on, arising
out of, or in connection with any Released Matter.  Notwithstanding
the foregoing, nothing contained herein shall preclude Employee from
exercising Employee's rights subject to Section 14(i) hereof in the
event Maxicare breaches any of its obligations hereunder.

<PAGE>






        7.      Resignation as a Director of Maxicare.  Effective
upon the Effective Date of this Release, Employee shall resign as a
Director of Maxicare and shall deliver to Maxicare an executed letter
of resignation, the form of which is attached hereto and made a part
hereof as Exhibit "B".

        8.      Withholding Taxes.  Employee understands and agrees
that Maxicare shall be entitled to and shall withhold from any
Release Date Payments or other payment required hereby such
applicable state and federal withholding or similar taxes as may be
required. 

        9.      Survival of Employment Agreement Provisions.  The
rights and/or obligations of Maxicare and Employee under Sections 10
(with Employee's termination date pursuant to the last paragraph of
Section 10  defined for the purposes hereof as the Termination Date),
11 , 12, 13, 14, 16 (solely with respect to any Affected Payment
which is solely attributable amounts payable under this Release with
respect to the Lump Sum Severance Payments or the Sale Bonus) and
18(d) the Employment Agreement shall not be affected hereby, which
rights and obligations or provisions shall survive in accordance with
the terms of the Employment Agreement.

        10.     No Representations. The parties hereto represent and
acknowledge that in executing this Release they do not rely and have
not relied upon any representation or statement made by any of the
parties or by any of the parties' agents, attorneys or
representatives with regard to the subject matter, basis or effect of
this Release or otherwise, other than those specifically stated in
this written Release.  

        11.     Federal Age Discrimination in Employment Act.
Employee acknowledges and agrees that: 

                (a)      this Release constitutes a voluntary waiver
of any and all rights and claims Employee has against the Maxicare
Released Parties as of the date of the Employee's execution of this
Release under the Federal Age Discrimination in Employment Act of
1986, 29 U.S.C. Section 621, et. seq.;

                (b)      Employee has waived rights or Claims
pursuant to this Release in exchange for the consideration received
from Maxicare, including  but not limited to Maxicare's payment of
the Additional Lump Sum Payment, the value of which exceeds payment
or remuneration to which Employee was already entitled;

<PAGE>






                (c)      Employee has been advised to consult with an
attorney concerning this Release prior to executing it;

                (d)      Employee was given twenty-one (21) days to
consider the terms of this Release; and

                (e)      Employee may revoke this Release at any time
during the seven (7) days following Employee's execution of this
Release and that this Release does not become effective or
enforceable until the Release Revocation Period has expired, which
will be the Effective Date of this Release. 

        12.     Release of Future Rights and Benefits.  Employee
acknowledges and agrees that the Company, at the Employee's request,
has agreed to pay to the Employee the Additional Lump Sum Payment as
full satisfaction and discharge of Employee's rights and Claims with
respect to certain benefits and future contingent compensation under
the Employment Agreement, including but not limited to  Employee's
relinquishment of all rights and future benefits under Section 5 of
the Employment Agreement in existing benefit plans and plans which
may in the future be established and in future Performance Bonuses
under Section 4(b) of the Employment Agreement.  Employee is aware
that the value of the future benefits being relinquished by such
Employee could greatly exceed the Additional Lump Sum Payment and
the value of the future Performance Bonuses could in the aggregate
exceed $6,000,000. Nothing contained herein, shall require Maxicare
to maintain any plan or benefit program for its employees or
executives or prohibit Maxicare from establishing any new benefits or
plans in the future any rights or interests to which Employee is
expressly waiving by the terms hereof.  Notwithstanding the foregoing
and without the encouragement by or request of the Company, the
Employee has elected to forego these rights and benefits and certain
other rights in return for the Additional Lump Sum Payment.

        13.     Non-Assignment of Released Matters.  Employee
represents and warrants that Employee has not heretofore assigned or
transferred, or purported to assign or transfer, to any person, firm
or corporation whomsoever any Claim.  In the event that any Claim
arising out of or relating to a Released Matter should be made or
instituted against any Maxicare Released Parties because of any such
purported assignment or transfer, Employee agrees to indemnify and
hold harmless such Maxicare Released Partes and to satisfy any such
Claim, including reasonable expenses of investigation, attorneys'
fees and costs relating thereto.

<PAGE>






        14.     Miscellaneous

                (a)      Employee acknowledges that this Release
affects the settlement of claims which are denied and contested by
Maxicare, and that nothing contained herein shall be construed as an
admission of liability by or on behalf of Maxicare, by whom liability
is expressly denied.

                (b)      Employee acknowledges that Maxicare has
advised Employee to seek the advice of counsel in connection with
Employee's rights with respect to the Employment Agreement, the
termination of his employment with Maxicare and this Release.  In
connection therewith, Employee has been represented by and has
consulted with counsel of his own choice throughout the Release
Review Period, with respect to the above and the negotiations which
preceded Employee's execution of this Release and during the Release
Revocation Period.

                (c)      This Release shall be binding upon and shall
inure to the benefit of (and be enforceable by) Employee and his
respective legal heirs in the event of Employee's death or
incompetency.  All of the covenants and arguments herein contained in
favor of the Maxicare Released Parties are for the express benefit of
each and all of them.

                (d)      This Release is made and entered into in the
State of California and shall be interpreted and enforced under and
pursuant to the laws of said jurisdiction.

                (e)      Wherever in this Release the context may
require, the masculine gender shall be deemed to include the feminine
and/or neuter, and the singular to include the plural.

                (f)      This Release shall be binding upon and inure
to the benefit of Maxicare and the Maxicare Released Parties and any
successors thereto.  This Release shall not be terminated by the
voluntary or involuntary dissolution of Maxicare or by any merger,
reorganization or other transaction in which Maxicare is not the
surviving or resulting corporation or upon any transfer of all or
substantially all of the assets of Maxicare in the event of any such
merger, or transfer of assets.  

                (g)      This Release may not be modified, altered or
amended except by an instrument in writing signed by the parties
hereto.
 
                (h)      Nothing in the Release is intended to
require or shall be construed as requiring Maxicare to do or fail

<PAGE>
 to do any act in violation of applicable law.  Maxicare's inability





pursuant to court order to perform its obligations under this Release
shall not constitute a breach of this Release.  If any provision of
this Release is invalid or unenforceable, the remainder of this
Release 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. 

                (i)      The parties hereto agree that any and all
disputes hereunder, including but not limited to, any purported
breach by Maxicare of its obligations pursuant to Section 3 hereunder
or otherwise, shall be submitted to a court located in Los Angeles,
California and in this regard, the parties agree that they shall
consent to personal jurisdiction in any state and/or the United
States District Court for the Central District of California sitting
in Los Angeles, California and agree to venue in the State of
California.  All costs and expenses (including attorneys' fees)
incurred by the parties in connection with any dispute arising under
this Release, shall be apportioned between the parties by such court
based upon such court's determination of the merits of their
respective positions.                                      

                (j)      Any notice to Maxicare required or permitted
hereunder shall be given in writing to Maxicare, either by personal
service, telex, telecopier or, if by mail, by registered or certified
mail return receipt requested, postage prepaid, duly addressed to the
Chief Executive Officer of Maxicare at the address set forth above or
to such other addresses as Maxicare may hereinafter notify Employee,
with a copy to Barry L. Burten, Esq., Jeffer, Mangels, Butler &
Marmaro LLP, 2121 Avenue of the Stars, 10th Floor, Los Angeles,
California 90067.  Any such notice to Employee shall be given in a
like manner, and if mailed shall be addressed to Employee at
Employee's home address set forth above with a copy to Philip S.
Magaram, Esq., Valensi Rose & Magaram PLC, 1800 Avenue of the Stars,
Suite 1000, Los Angeles, California 90067. For the purpose of
determining compliance with any time limit herein, a notice shall be
deemed given on the fifth business day following the postmarked date,
if mailed, or the date of delivery if personally delivered or
delivered by telex or telecopier.

                (k)      A waiver by either party of any term or
condition of this Release 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. 

                (l)      The paragraph and subparagraph headings
contained in this Release are solely for convenience and shall not be
considered in its interpretation. 

<PAGE>






                (m)      This Release may be executed in one or more
counterparts, each of which shall constitute an original. 

                (n)      Employee represents and agrees that Employee
has carefully read and fully understands all of the provisions of
this Release and is voluntarily entering into this Release.

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

                                                                     
                         MAXICARE HEALTH PLANS, INC.   
                         a Delaware corporation

By: ________________________      By:__________________________
    Alan D. Bloom, Secretary      Its:_________________________

                                    
                                  _____________________________
                                       Eugene L. Froelich 

<PAGE>






                         EXHIBIT "A" TO RELEASE 
                CALCULATION OF EMPLOYEE SERP BENEFITS

        Maxicare is not willing to agree to the payment of Employee's
SERP benefits in a lump sum at this time, nor will it commit to do so
in the future. The following methodology will be utilized in
calculating future benefits payable pursuant to the SERP and in
interpreting the terms of the SERP:

                a.       From the Termination Date of Employee's
employment through the first to occur of either (i) March 31, 2001 or
(ii) the commencement of the payment of monthly retirement benefits
to Employee pursuant to his election, Employee will continue to
accrue months and years of service under the SERP as though Employee
was still employed at Maxicare; 

                b.       In addition, in calculating any reduction of
benefits as a result of Employee's election to receive retirement
benefit payments prior to the age of 65 the payments will be reduced
in accordance with the SERP by 1/240 for each month prior to reaching
age 65 that Employee commences receipt of such monthly benefits;  

                c.       The average of the last three years of
annualized compensation for the purposes of calculating any payments
under the SERP will give Employee credit for each of the remaining
years under his Employment Agreement through the date he elects to
commence receiving the monthly benefits under the SERP as though he
remained employed by Maxicare.    Since Employee has elected to be
bought out on his Performance Bonus, it will be deemed solely for the
purposes of this calculation to be $8,333 per month for each of the
calendar years 1999 and 2000 and $33,333 per month for the first
three months of the calendar year 2001 and zero dollars for each
month during 1998 (since no Performance Bonus would have been paid in
calendar 1998 for 1997). In determining compensation for the purposes
of calculating an early retirement benefit under Section 5.02 of the
SERP, the compensation for the 36 months immediately preceding the
month in which the first payment under the SERP is made to Employee
will be utilized. In determining compensation for the purposes of
calculating the normal retirement benefit under Section 5.01 of the
SERP, the compensation for the 36 months preceding April 1, 2001 will
be utilized.  See item f. below;

                d.       Subject to the foregoing, the monthly
benefits under the SERP shall be calculated by Hewitt Associates or
such other third party firm which Maxicare utilizes to calculate the
benefits of the SERP in accordance with such firm's actuarial
practice;  

<PAGE>






                e.       Except as expressly set forth herein, all of
the terms and conditions of the SERP and rights and obligations of
Maxicare thereunder shall remain in full force and effect; and

                f.       Schedule of monthly compensation from
January, 1995 through March 2001 for the purposes of calculating the
retirement benefits payable under the SERP:     


        Month   Base Salary       Performance Bonus Total

        1995
        1/95     $27,083          $ 8,333                    $ 35,416
        2/95      27,083            8,333                      35,416
        3/95      27,083            8,333                      35,416
        4/95      27,083            8,333                      35,416
        5/95      27,083            8,333                      35,416
        6/95      27,083            8,333                      35,416
        7/95      27,083            8,333                      35,416
        8/95      27,083            8,333                      35,416
        9/95      27,083            8,333                      35,416
        10/95     27,083            8,333                      35,416
        11/95     27,083            8,333                      35,416
        12/95     27,083            8,333                      35,416

        1996
        1/96      31,170           21,405                      52,575
        2/96      31,170           21,405                      52,575
        3/96      31,170           21,405                      52,575
        4/96      31,170           21,405                      52,575
        5/96      31,170           21,405                      52,575
        6/96      31,170           21,405                      52,575
        7/96      31,170           21,405                      52,575
        8/96      31,170           21,405                      52,575
        9/96      31,170           21,405                      52,575
        10/96     31,170           21,405                      52,575
        11/96     31,170           21,405                      52,575
        12/96     31,170           21,405                      52,575

        1997
        1/97      33,333           12,239                      45,572
        2/97      33,333           12,239                      45,572
        3/97      33,333           12,239                      45,572
        4/97      33,333           12,239                      45,572
        5/97      33,333           12,239                      45,572
        6/97      33,333           12,239                      45,572
        7/97      33,333           12,239                      45,572
        8/97      33,333           12,239                      45,572

<PAGE>





        9/97      33,333           12,239                      45,572
        10/97     33,333           12,239                      45,572
        11/97     33,333           12,239                      45,572
        12/97     33,333           12,239                      45,572

        1998
        1/98      33,333            -0-                        33,333
        2/98      33,333            -0-                        33,333
        3/98      33,333            -0-                        33,333
        4/98      33,333            -0-                        33,333
        5/98      33,333            -0-                        33,333
        6/98      33,333            -0-                        33,333
        7/98      33,333            -0-                        33,333
        8/98      33,333            -0-                        33,333
        9/98      33,333            -0-                        33,333
        9/98      33,333            -0-                        33,333
        10/98     33,333            -0-                        33,333
        11/98     33,333            -0-                        33,333
        12/98     33,333            -0-                        33,333

        1999
        1/99      33,333            8,333                      41,666
        2/99      33,333            8,333                      41,666
        3/99      33,333            8,333                      41,666
        4/99      33,333            8,333                      41,666
        5/99      33,333            8,333                      41,666
        6/99      33,333            8,333                      41,666
        7/99      33,333            8,333                      41,666
        8/99      33,333            8,333                      41,666
        9/99      33,333            8,333                      41,666
        10/99     33,333            8,333                      41,666
        11/99     33,333            8,333                      41,666
        12/99     33,333            8,333                      41,666

        2000
        1/99      33,333            8,333                      41,666
        2/99      33,333            8,333                      41,666
        3/99      33,333            8,333                      41,666
        4/99      33,333            8,333                      41,666
        5/99      33,333            8,333                      41,666
        6/99      33,333            8,333                      41,666
        7/99      33,333            8,333                      41,666
        8/99      33,333            8,333                      41,666
        9/99      33,333            8,333                      41,666
        10/99     33,333            8,333                      41,666
        11/99     33,333            8,333                      41,666
        12/99     33,333            8,333                      41,666

<PAGE>






        2001
        1/01      33,333            33,333            66,666
        2/01      33,333            33,333            66,666
        3/01      33,333            33,333            66,666

<PAGE> 






                                  

                                  Eugene L. Froelich
                   14152 Valley Vista Boulevard
                  Sherman Oaks, California 91423


                         January 22, 1998 




Peter J. Ratican Chairman of the Board and Chief Executive Officer
Maxicare Health Plans, Inc. 1149 South Broadway Street, Suite 910 Los
Angeles, California 90015

        Re:  Maxicare Health Plans, Inc. (the "Company") -        Res
ignation

Dear Peter:

        This is to confirm that I, Eugene L. Froelich, hereby resign
from my position as a Director of the Company (the "Resignation").
Said Resignation shall become effective on the "Effective Date", as
such term is defined in that certain Release dated January 22, 1998
between me and the Company

                                           Sincerely,



                                           Eugene L. Froelich