Exhibit 10.87
























                    MAXICARE HEALTH PLANS, INC.


              Supplemental Executive Retirement Plan


                         TABLE OF CONTENTS



                                                            Page

SECTION 1.    DEFINITIONS . . . . . . . . . . . . . . . . . . .1

SECTION 2.    PARTICIPATION . . . . . . . . . . . . . . . . . .4
      2.01      Appointment by Board of Directors . . . . . . .4

SECTION 3.    FUNDING OF BENEFITS . . . . . . . . . . . . . . .5
      3.01.     Unfunded Plan . . . . . . . . . . . . . . . . .5

SECTION 4.    CLAIMS PROCEDURE.  .  .  .  .  .  . . . . . . . .5
      4.01.     Benefit Claims Procedure. . . . . . . . . . . .5
      4.02.     Appeals Procedure . . . . . . . . . . . . . . .5

SECTION 5.    RETIREMENT INCOME BENEFITS. . . . . . . . . . . .6
      5.01.     Normal Retirement Benefit . . . . . . . . . . .6
      5.02.     Early Retirement Benefit. . . . . . . . . . . .6
      5.03.     Change of Control . . . . . . . . . . . . . . .7
      5.04.     Standard Form of Benefit. . . . . . . . . . . .7
      5.05.     Optional Forms of Benefit . . . . . . . . . . .7
      5.06.     Disability. . . . . . . . . . . . . . . . . . .7
      5.07.     Leave . . . . . . . . . . . . . . . . . . . . .7
      5.08.     Vesting . . . . . . . . . . . . . . . . . . . .8
      5.09.     Comparable Plan Offset. . . . . . . . . . . . .8
      5.10.     No Duplication of Benefits. . . . . . . . . . .8

SECTION 6.    PRE-RETIREMENT DEATH BENEFITS . . . . . . . . . .8
      6.01.     Designation of Beneficiary. . . . . . . . . . .8
      6.02.     Pre-Retirement Death Benefit. . . . . . . . . .9

SECTION 7.    ADMINISTRATION OF THE PLAN. . . . . . . . . . . .9
      7.01.     Appointment of Committee. . . . . . . . . . . .9
      7.02.     Duties and Powers. . . . . . . . . . . . . . . 10
      7.03.     Conduct of Its Affairs . . . . . . . . . . . . 10
      7.04.     Allocation of Responsibilities . . . . . . . . 10
      7.05.     Expenses of the Committee. . . . . . . . . . . 10
      7.06.     Information to be Submitted to the Committee . 10
      7.07.     Notices, Statements and Reports. . . . . . . . 10
      7.08.     Service of Process . . . . . . . . . . . . . . 11
      7.09.     Insurance. . . . . . . . . . . . . . . . . . . 11
      7.10.     Indemnity. . . . . . . . . . . . . . . . . . . 11

SECTION 8.    AMENDMENT, SUSPENSION, AND TERMINATION . . . . . 11
      8.01.     Right to Amend or Terminate. . . . . . . . . . 11
      8.02.     Right to Suspend . . . . . . . . . . . . . . . 11
      8.03.     Right to Accelerate. . . . . . . . . . . . . . 11
<PAGE>

                                                            Page

SECTION 9.    MISCELLANEOUS. . . . . . . . . . . . . . . . . . 12
      9.01.   No Right to Continued Employment . . . . . . . . 12
      9.02.   Prohibition Against Alienation . . . . . . . . . 12
      9.03.   Savings Clause . . . . . . . . . . . . . . . . . 12
      9.04.   Payment of Benefit of Incompetent. . . . . . . . 12
      9.05.   Withholding. . . . . . . . . . . . . . . . . . . 12
      9.06.   Beneficiary's Interest . . . . . . . . . . . . . 12
      9.07.   Successors . . . . . . . . . . . . . . . . . . . 13
      9.08.   Gender, Tense and Headings . . . . . . . . . . . 13

SECTION 10.   CONSTRUCTION . . . . . . . . . . . . . . . . . . 13
      10.01.    Choice of Law. . . . . . . . . . . . . . . . . 13


APPENDIX A - ACTUARIAL ASSUMPTIONS
<PAGE>

                    MAXICARE HEALTH PLANS, INC.
              SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


     MAXICARE  HEALTH  PLANS,  INC.  (hereinafter  referred  to  as
the"Company"),  hereby  adopts  the  Maxicare  Health  Plans,  Inc.
Supplemental Executive Retirement Plan  (hereinafter referred to as
the "Plan") effective as of  January  1,  1997.  The purpose of the
Plan is to  provide  supplemental  retirement  benefits for certain
executives of the Company  and  certain  of its subsidiaries and to
provide a  measure  of  security  for  such  executives through the
payment of death benefits for their beneficiaries.

     It is intended that this  Plan  provide benefits solely for "a
select group of management  or highly compensated employees" within
the  meaning  of  Sections  201,  301  and  401  of  the  "Act" (as
hereinafter  defined),  and  therefore   to   be  exempt  from  the
provisions of Parts 2, 3 and 4 of Subtitle B of Title I of the Act.


                      SECTION 1. DEFINITIONS


     The following words and terms as used herein shall, unless the
context clearly requires a  different  meaning, have the respective
meanings hereinafter  set  forth.    Except  as otherwise expressly
provided,  the  masculine  gender  includes  the  feminine  and the
singular includes the plural.

     1.01.  "Act" means the Employee Retirement Income Security Act
of 1974, as amended from time to time.

     1.02.  "Average Compensation"  means  the mathematical average
of a Participant's Compensation, for  his  final three (3) Years of
Service, not counting any Years of Service that commences after the
Plan Year in which  the  Participant's  designation as an Executive
for purposes of this  Plan  is  revoked  by the Board of Directors;
provided, however, that  for  any  Participant  that has fewer than
three  (3)  Years  of  Service  counted  under  this  Plan, Average
Compensation means  the  mathematical  average  of his Compensation
over the number of his Years of Service counted under the Plan.

     1.03.  "Beneficiary" means a person  or persons entitled under
the provisions of Section 6.01 to  receive benefits in the event of
the death of a Participant.

     1.04.  "Board of Directors"  means  the  Board of Directors of
the Company.

     1.05.  "Change of Control"  means,  after  the Effective Date,
any transaction or occurrence as the result of which:

            (a)   the Company shall  cease  to  be a publicly owned
corporation having at least 300 stockholders; or
<PAGE>


            (b)   any person or  group  of  persons  (as defined in
Rule 13d-5 promulgated under  the  Securities  Exchange Act of 1934
(the "Exchange Act"), together  with  its affiliates, is or becomes
the beneficial owner (as  defined  in  Rule 13d-3 promulgated under
the Exchange Act),  directly  or  indirectly,  of securities of the
Company (including securities  convertible  into or exercisable for
securities of the Company) ordinarily  having  the right to vote in
the election of  directors  which  together represent, after giving
effect to any conversion  or  exercise,  in excess of forty percent
(40%) of the  combined  voting  power  of the Company's outstanding
securities ordinarily having the right  to  vote in the election of
directors; or

            (c)   "Continuing Directors"  (as  defined below) shall
cease for any reason to constitute at least a majority of the Board
of Directors; or

            (d)   the Company shall  merge  or consolidate with any
other person  or  entity  other  than  a  subsidiary,  and upon the
consummation of such transaction,  holders  of  the common stock of
the Company immediately  prior  to  such  transaction own less than
sixty percent (60%) of  the  equity  securities of the surviving or
consolidated entity; or

            (e)   all or substantially  all  of  the  assets of the
Company are sold or transferred  to  another  person or entity in a
single transaction or a series of related transactions.

     Notwithstanding the foregoing, a  Change  of Control shall not
include the filing by  or  on  behalf  of, or entering against, the
Company or its subsidiaries of  (i)  a petition, decree or order of
bankruptcy or reorganization, or  (ii)  a petition, decree or order
for the appointment of a trustee, receiver, liquidator, supervisor,
conservator or other officer  or  agency having similar powers over
the Company  or  its  subsidiaries,  including  any such petitions,
orders or decrees filed or  entered  by federal or state regulatory
authorities.

     For purposes of  this  definition,  a "Continuing Director" is
any individual who is a member of  the Board of Directors as of the
Effective Date and any  subsequent  director nominated by the Board
of Directors for election by  the  stockholders or appointed to the
Board of Directors, which  nomination  or  appointment is made with
the affirmative vote  of  a  majority  of Continuing Directors then
serving on the Board of Directors.

     1.06.  "Code" means  the  Internal  Revenue  Code  of 1986, as
amended from time to time.

     1.07.  "Committee"  means  the  Committee   of  the  Board  of
Directors appointed and acting,  from  time  to time, to administer
the Plan pursuant to Section 7.01.

<PAGE>

     1.08.  "Company"  means  Maxicare   Health  Plans,  Inc.,  its
successors and assigns.

     1.09.  "Compensation" means the  base  salary and annual bonus
paid  to  an  Executive   during   a  Year  of  Service,  excluding
commissions, overtime, reimbursements,  updates, corporate provided
fringe  benefits,  gain  on  exercise  of  stock  options,  or  any
contributions  or  benefits   under  any  pension,  profit-sharing,
deferred compensation,  accident  or  health  plan  adopted  by the
Employer.  If an Executive dies or suffers Disability during a Year
of Service, his Compensation for that year shall be the greater of

            (a)   the actual Compensation  he  received during that
year prior to his death or Disability; or

            (b)   his Compensation for  the  immediately prior Year
of Service.

     1.10.  "Disability" means the inability,  caused by disease or
bodily  injury  and   originating   after   his  designation  as  a
Participant, of an Executive  to  do substantially all the material
duties of his regular job, except that

            (a)   after such inability has continued for two years,
such Executive shall be considered  to be suffering Disability only
if he cannot work for pay or  profit at another job for which he is
reasonably fitted by education, training or experience; and

            (b)   such  Executive   shall   be   considered  to  be
suffering Disability only for those  periods during which he is not
working for pay or profit.

     1.11.  "Early Retirement  Date"  means  the  first  day of the
month  coinciding  with,   or   next   following,  a  Participant's
attainment of age 55.

     1.12.  "Effective Date" means January 1, 1997.

     1.13.  "Employer"  means  the   Company,   and   each  of  its
subsidiaries and other  corporations  it  controls that has adopted
the Plan with the approval of the Board of Directors.

     1.14.  "Executive" means  a  management  or highly compensated
employee of the Employer  who  has  been specifically designated by
the Board of Directors  or  the  Committee  as eligible to become a
Plan Participant, such designation  not  having been revoked.  Upon
such revocation, the former Executive  shall be entitled to receive
only those benefits determined  as  of  the date of revocation, and
only to the extent the former Executive becomes vested therein.

     1.15.  "Leave" means any period  during which an Executive who
is employed by the  Employer  immediately prior to the commencement
thereof is absent  from  service  with  the  Employer pursuant to a
leave of absence granted by the Employer.
<PAGE>


     1.16.  "Normal Retirement Date"  means  the  first  day of the
month  coinciding  with,   or   next   following,  a  Participant's
attainment of age 65.

     1.17.  "Participant" means an individual  who has been, or who
was at  any  time,  designated  as  an  Executive  by  the Board of
Directors for purposes of  the  Plan.  An individual shall remain a
Participant until either he terminates employment with the Employer
without being vested in  his  benefits  under this Plan pursuant to
Section 5.08, or his entire Retirement Income Benefit has been paid
out.

     1.18.  "Plan"   means   the   Maxicare   Health   Plans,  Inc.
Supplemental Executive Retirement Plan, as  set forth herein and as
hereafter amended.

     1.19.  "Plan Year" means the calendar year.

     1.20.  "Pre-Retirement  Death   Benefit"   means  the  benefit
payable to the Beneficiary of  a  vested Participant who dies prior
to the commencement of payment of his Retirement Income Benefit, as
described in Section 6.

     1.21.  "Retirement Income Benefit" means the benefit described
in Section 5.

     1.22.  "Year of Service" means

            (a)   for  purposes  of   determining  Compensation,  a
payroll calendar year during which the Participant is, and receives
salary as, a full-time employee of the Employer; and

            (b)   for all  other  Plan  purposes,  a 12-consecutive
month period commencing  on  a  Participant's  date  of hire by the
Employer and anniversaries  thereof,  during  which the Participant
is, and receives salary as, a full-time employee of the Employer.

                    SECTION 2.   PARTICIPATION


     2.01.  Appointment  by  Board  of  Directors.    The  Board of
Directors or the Committee  may,  from  time to time, designate any
management or highly  compensated  employee  of  the Employer as an
"Executive" for purposes of this  Plan.   Upon being so designated,
such  an  employee  shall  become  a  Participant  under  the Plan.
However, the Participant's right to  receive any benefits under the
Plan shall be subject to all of the terms of the Plan.


                 SECTION 3.   FUNDING OF BENEFITS


     3.01.  Unfunded  Plan.  The  Plan  shall  be  unfunded.    All
benefits payable under the Plan  shall  be paid from the Employer's
general assets.  The Employer shall not be required to set aside or
<PAGE>

hold in  trust  any  funds  for  the  benefit  of  a Participant or
Beneficiary, who  shall  have  the  status  of  a general unsecured
creditor with respect to the  Employer's obligation to make benefit
payments  pursuant  to  the  Plan.    Any  assets  of  the Employer
available to pay Plan benefits  shall  be  subject to the claims of
the Employer's general creditors and may be used by the Employer in
its sole discretion for any purpose.


                   SECTION 4.   CLAIMS PROCEDURE


     4.01.  Benefit  Claims  Procedure.      All  applications  for
benefits under the Plan shall be submitted to a Committee member at
the Employer's  principal  place  of  business.    Applications for
benefits must be in writing  and  must be signed by the Participant
or,  in  the  case  of  a  Pre-Retirement  Death  Benefit,  by  the
Beneficiary or legal  representative  of  the deceased Participant.
The Committee reserves the  right  to  require that the Participant
furnish proof of his age prior to processing any application.  Each
application shall be acted upon  and approved or disapproved within
ninety (90) days following  its  receipt  by  the Committee. In the
event any application for benefits  is  denied in whole or in part,
the Committee shall notify the  applicant in writing of such denial
and of his right to a review  by the Committee and shall set forth,
in a manner calculated to  be understood by the applicant, specific
reasons for  such  denial,  specific  references  to pertinent Plan
provisions on which  the  denial  is  based,  a  description of any
additional material or information  necessary  for the applicant to
perfect his application,  an  explanation  of  why such material or
information is necessary, and  an  explanation of the Plan's review
procedure.

     4.02.  Appeals Procedure.  Any  person  or his duly authorized
representative whose application for benefits is denied in whole or
in part may appeal such denial to the Committee for a review of the
decision by submitting  to  a  Committee  member within ninety (90)
days after  receiving  written  notice  from  the  Committee of the
denial of his claim a written statement

            (a)   requesting  a  review  by  the  Committee  of his
application for benefits;

            (b)   setting forth all of  the  grounds upon which his
request for review is based and any facts in support thereof; and

            (c)   setting forth  any  issues  or  comments that the
applicant deems pertinent to his application.

     The  Committee  shall  regularly  review  appeals applications
submitted to it.   The  Committee  shall  act upon each application
within sixty (60) days after receipt of the applicant's request for
review by the Committee.

     The Committee shall make a  full  and fair review of each such
application and any written materials submitted by the applicant or
<PAGE>

the Employer in connection  therewith  and may require the Employer
or the applicant  to  submit  such  additional facts, documents, or
other evidence  as  the  Committee  in  its  sole  discretion deems
necessary or advisable in making  such  a  review.  On the basis of
its review, the Committee  shall  make an independent determination
of the applicant's eligibility  for  benefits  under the Plan.  The
decision of the Committee on  any application for benefits shall be
final and conclusive upon all  persons, if supported by substantial
evidence in the record.

     In the event that the Committee denies an application in whole
or  in  part,  the  Committee  shall  give  written  notice  of the
Committee's decision to the  applicant  setting  forth, in a manner
calculated to be understood by  the applicant, the specific reasons
for such  denial  and  specific  references  to  the pertinent Plan
provisions on which the Committee's decision was based.


              SECTION 5.   RETIREMENT INCOME BENEFITS


     5.01.  Normal  Retirement  Benefit.     Each  Participant  who
retires on or after his Normal Retirement Date shall be entitled to
a Retirement Income  Benefit,  which  shall,  if  commencing on the
first day of the month after  his  Normal Retirement Date, be in an
annual  amount  equal  to   twenty   five   percent  (25%)  of  the
Participant's Average Compensation,  such  amount  to be reduced by
1/15 for each  Year  of  Service  by  which the Participant's total
Years of Service is less than  15.   The payment of such Retirement
Income Benefit  shall  commence  on  the  first  day  of  the month
following the month  of  retirement  and  shall  be  in the form of
benefit specified in Section 5.04  or  5.05, as applicable.  In the
case of a Participant who retires after his Normal Retirement Date,
the amount of the Retirement Income Benefit shall be adjusted to be
the  actuarial  equivalent   of   the   Retirement  Income  Benefit
commencing  on  the  first  day  of  the  month  after  his  Normal
Retirement Date.  Actuarial equivalence  shall be determined on the
basis of the actuarial assumptions  set  forth in Appendix A to the
Plan.

     5.02.  Early  Retirement  Benefit.      Each  Participant  who
retires,  or  voluntarily  or  involuntarily  terminates employment
prior to his  Normal  Retirement  Date  but  on  or after his Early
Retirement Date, shall be  entitled  to a Retirement Income Benefit
in  an  amount  equal  to  the  amount  described  in  Section 5.01
commencing on his Normal Retirement Date.  However, the Participant
shall be entitled to  elect  to  commence payment of his Retirement
Income Benefit earlier than  his  Normal  Retirement Date by filing
with the Committee  a  form  prescribed  by  the Committee for this
purpose.  If  the  Participant  elects  such  early commencement of
hisRetirement Income  Benefit,  such  benefit  shall  be reduced by
1/240 for each month,  or  portion  thereof,  by which such benefit
commencement precedes his Normal  Retirement  Date.  The payment of
such Retirement Income Benefit shall  commence  on the first day of
the month specified by the Participant in a timely submitted
<PAGE>

election form, and shall  be  in  the  form of benefit specified in
Section 5.04 or 5.05, as applicable.

     5.03.  Change of Control.   If,  within  two (2) years after a
Change of Control, a Participant is terminated from employment with
the  Employer  or  its  successor,  the  Plan  is  terminated,  the
Participant's  designation  as  an  Executive  is  revoked,  or the
Employer  or  its  successor  attempts  to  cancel  or  reduce  the
Participant's projected  Retirement  Income  Benefit  as determined
immediately prior to  such  event,  then  the  Participant shall be
immediately  100%  vested  in  his  Retirement  Income  Benefit, as
determined immediately prior  to  such  event,  and payment of such
benefit shall commence  to  the  Participant  at  such  time as the
Participant  shall  elect  in  writing,  subject  to  any reduction
pursuant to Section  5.02  if  such  commencement  is  prior to the
Participant's Normal Retirement Date.

     5.04.  Standard Form of Benefit.   Unless, pursuant to Section
5.05, the Participant requests,  and  the Committee consents to, an
optional  form  of  benefit,  the  Participant's  Retirement Income
Benefit under this Section 5 shall  be  paid  in the form of a life
annuity payable monthly.  In  the  event the Participant dies after
benefit payments have commenced  but  prior  to having received 120
monthly benefit payments,  such  payments  will  continue after the
Participant's death to his  Beneficiary  until  an aggregate of 120
monthly  payments  have  been  made  to  the  Participant  and  his
Beneficiary.

     5.05.  Optional  Forms  of   Benefit.     If  the  Participant
requests, and the Committee consents (which consent may be given or
withheld in the  sole  discretion  of  the  Committee), any benefit
payable pursuant to this Section 5  may be paid in an optional form
which is the  actuarial  equivalent  of  the  benefit payable under
Section 5.04.   Actuarial  equivalence  shall  be determined on the
basis of the actuarial assumptions  set  forth in Appendix A to the
Plan.

     5.06.  Disability.  An Executive  who suffers Disability shall
be  deemed  to  remain  an   Executive  for  the  duration  of  the
Disability, and his eligibility  for Retirement Income Benefits and
the  eligibility  of  his   Beneficiary  for  Pre-Retirement  Death
Benefits in the  event  of  the  Participant's  death  shall not be
affected thereby.    Nevertheless,  the  Participant  shall  not be
deemed to be receiving Compensation  during  any period in which he
is not receiving a salary.

     5.07.  Leave.  For purposes of  Sections 5 and 6, an Executive
who is on Leave with salary  shall be deemed to remain an Executive
for the duration  of  the  Leave.    An  Executive  who is on Leave
without salary shall  be  deemed  to  remain  an Executive upon his
resumption of employment after a  Leave  for a period not in excess
of six (6) months;  if  the  Leave  period  exceeds six months, the
Executive  shall  be  deemed  to  have  voluntarily  terminated his
employment with the Employer  without  the  consent of the Board of
Directors as of the end of the six month period.
<PAGE>


     5.08.  Vesting.  A Participant shall become 100% vested in his
Retirement Income Benefit upon attainment  of  his Early Retirement
Date, but only if  he  remains  employed  by  the Employer at least
until that date.  A  Participant  shall  also become 100% vested in
his Retirement Income Benefit  following  a Change of Control under
the circumstances described  in  Section  5.03.    If a Participant
terminates employment  with  the  Employer  prior  to having become
vested  pursuant  to   the   preceding   two  sentences,  he  shall
immediately forfeit all  benefits  under  the  Plan.  A Participant
shall not be deemed terminated with the Employer merely because his
employment is transferred  from  one  Employer  to another Employer
without any lapse in employment.

     5.09.  Comparable Plan Offset.  Any benefits otherwise payable
to or in respect of a Participant under Sections 5 or 6 of the Plan
shall be reduced by the amount of benefits payable to or in respect
of  the  Participant  from  a  comparable  plan  maintained  by the
Employer or an affiliate of  the  Employer.  The Board of Directors
shall determine whether a plan  under which benefits are payable to
or in respect of  a  Participant  constitutes a comparable plan for
purposes of this Section 5.09.

     5.10.  No Duplication of  Benefits.   The Pre-Retirement Death
Benefit and the Retirement Income  Benefit  under the Plan shall be
mutually exclusive with respect to  each Plan Participant.  Thus, a
Participant who  has  commenced  receipt  of  his Retirement Income
Benefit shall not have any  Pre-Retirement Death Benefit payable to
his  Beneficiary,  and  the  payment  of  any  Pre-Retirement Death
Benefit to  a  Beneficiary  of  a  Participant  shall  preclude the
payment  of  any  Retirement  Income  Benefit  in  respect  of  the
Participant.


            SECTION 6.   PRE-RETIREMENT DEATH BENEFITS


     6.01.  Designation of Beneficiary.

            (a)   A Participant (whether  or  not still employed by
the  Employer)   may   designate   a   Beneficiary  and  contingent
Beneficiary  by  the  completion,  execution  and  delivery  to the
Committee of a form for  that  purpose provided by the Committee at
any  time  prior  to  his  death  and  may  revoke  or  change  the
Beneficiary or  contingent  Beneficiary  designated therein without
the Beneficiary's consent  by  completing, executing and delivering
to the Committee a replacement form  at  any time, and from time to
time, prior to  his  death;  provided,  however,  that if a married
Participant designates any person other than the person who is then
his spouse, the Committee may require the Participant to furnish to
the  Committee  the  written   consent   of  such  spouse  to  such
designation in such form as the Committee may require.

            (b)   If  such   Participant   shall   have  failed  to
designate a Beneficiary for the receipt of death benefits hereunder
<PAGE>

or if no such Beneficiary shall survive him, then the following, in
the order named,  shall  be  the  designated  Beneficiary and shall
receive death benefits hereunder:

                  (i)    The  person  who  is  the  spouse  of  the
Participant at the Participant's death, or if none,

                  (ii)   The estate of the Participant.

            (c)   The death  benefits  to  which  a  Beneficiary is
entitled shall  be  (i)  in  the  event  the  Participant commences
receipt of his Retirement Income  Benefit under any form of benefit
in  which  a  Beneficiary  has  rights  to  benefits  following the
Participant's   death,   such   benefits   payable   following  the
Participant's death, and  (ii)  in  the  event the Participant dies
after becoming fully vested  in  his  Retirement Income Benefit but
prior to commencement  of  the  payment thereof, the Pre-Retirement
Death Benefit described in Section 6.02.

     6.02.  Pre-Retirement Death Benefit.    If  a Participant dies
after reaching his Early Retirement Date or otherwise becoming 100%
vested  in  his  Retirement   Income   Benefit  but  prior  to  the
commencement of  the  payment  thereof,  his  Beneficiary  shall be
entitled to a  Pre-Retirement  Death  Benefit  equal to two hundred
percent (200%) of the Participant's Average Compensation.  The Pre-
Retirement Death Benefit  shall  be  paid  to  the Beneficiary in a
single lump  sum  distribution  as  soon  as  practicable after the
Participant's  death.    If   the  Beneficiary  requests,  and  the
Committee consents (which consent may  be  given or withheld in the
sole discretion of the Committee), the Pre-Retirement Death Benefit
may be paid as a life annuity  or in another optional form which is
the actuarial equivalent (determined on  the basis of the actuarial
assumptions set forth in  Appendix  A  to  the Plan) of the benefit
payable as a single lump sum distribution.

     Notwithstanding the foregoing, the  Board of Directors may, at
the time of declaring  an  individual  an Executive, designate such
Executive to be eligible  only  for  Retirement Income Benefits and
not the Pre-Retirement  Death  Benefit.    In  the  event of such a
designation, the Beneficiary of such an Executive shall not receive
any Pre-Retirement Death Benefit under this Section 6.02.


              SECTION 7.   ADMINISTRATION OF THE PLAN


     7.01.  Appointment of Committee.   The  Committee shall be the
Compensation Committee of the  Board  of  Directors, subject to the
power of  the  Board  of  Directors  to  appoint  other  persons to
constitute the Committee.

     7.02.  Duties and Powers.   The Committee shall be responsible
for the general administration of the Plan and the proper execution
of its provisions. It shall also be responsible for the
<PAGE>

interpretation of the Plan  and  the determination of all questions
arising thereunder.    It  shall  maintain  all  necessary books of
accounts and records.  It shall have power to establish, interpret,
enforce, amend, and  revoke,  from  time  to  time,  such rules and
regulations for the administration of  the  Plan and the conduct of
its business as it deems appropriate, including the right to remedy
ambiguities, inconsistencies and omissions (provided such rules and
regulations  are  uniformly   applied   to  all  persons  similarly
situated).  Any action that the Committee is required or authorized
to take shall be final and  binding  upon each and every person who
is or may become a Plan Participant or Beneficiary.

     7.03.  Conduct of Its Affairs.    The  Committee  may act by a
majority of its members in office from time to time.  It may elect,
from time to time, one of its  own members to act as Chairman and a
different  person,  who  may  but  need  not  be  a  member  of the
Committee, to act as Secretary.   It  may authorize any one or more
of its members to execute  and  deliver  any documents on behalf of
the Committee.  A  Committee  member  must  absent himself from any
vote on any matter which directly affects him.

     7.04.  Allocation of Responsibilities.  As provided above, the
Board of Directors shall  appoint  the  Committee, but the Board of
Directors,  unless  acting   as   the   Committee,  shall  have  no
responsibility for the  operation  and  administration of the Plan.
The Committee may, from time  to  time,  allocate to one or more of
its members and may  delegate  to  any other person or organization
any  of  its  rights,  powers,  duties,  and  responsibilities with
respect to the operation and administration  of the Plan.  Any such
allocation and delegation shall  be  reviewed  at least annually by
the Committee and  shall  be  terminable  upon  such  notice as the
Committee in its sole discretion deems reasonable and prudent under
the circumstances.

     7.05.  Expenses  of  the  Committee.    The  expenses  of  the
Committee properly and actually incurred  in the performance of its
duties under the Plan shall be paid by the Employer.

     7.06.  Information to  be  Submitted  to  the  Committee.   To
enable the Committee to  perform  its functions, the Employer shall
supply full and timely information  to the Committee on all matters
relating  to  Executives  and  Participants  as  the  Committee may
require, and shall maintain such other records as the Committee may
determine are necessary in order  to  determine the benefits due or
which may become due  to  Participants or their Beneficiaries under
the Plan.  The  Committee  may  rely  on such records as conclusive
with respect to the matters set forth therein.

     7.07.  Notices, Statements and Reports.   The Company shall be
the "administrator" of the Plan  as  defined in Section 3(16)(A) of
the Act for purposes  of  the reporting and disclosure requirements
imposed by the Act and  the  Code.   The Committee shall assist the
Company,  as  requested,  in  complying  with  such  reporting  and
disclosure requirements.
<PAGE>


     7.08.  Service of Process.    The  Committee  may from time to
time designate an  agent  of  the  Plan  for  the  service of legal
process.  The Committee shall cause  such agent to be identified in
materials it distributes  or  causes  to  be  distributed when such
identification is required under applicable law.  In the absence of
such a designation, the Company shall  be the agent of the Plan for
the service of legal process.

     7.09.  Insurance.  The Company, in its discretion, may obtain,
pay for  and  keep  current  a  policy  or  policies  of insurance,
insuring  the  Committee  members,  the  members  of  the  Board of
Directors and  other  employees  to  whom  any  responsibility with
respect to  the  administration  of  the  Plan  has  been delegated
against any  and  all  costs,  expenses  and liabilities (including
attorneys' fees) incurred by such  persons  as a result of any act,
or omission to act,  in  connection  with  the performance of their
duties, responsibilities and  obligations  under  the  Plan and any
applicable law.

     7.10.  Indemnity.  If the Company does not obtain, pay for and
keep current the type of  insurance  policy or policies referred to
in Section 7.09, or if  such  insurance  is provided but any of the
parties referred to in subsection  7.09 incur any costs or expenses
which are not covered under  such  policies, then the Company shall
indemnify and hold such parties harmless  in the same manner and to
the same extent as directors  and  officers of the Company pursuant
to its Bylaws, subject  to  any  limitations  imposed by the Act on
such indemnification.


        SECTION 8.   AMENDMENT, SUSPENSION, AND TERMINATION


     8.01.  Right to Amend or Terminate.   The Company reserves the
right to terminate this Plan at  any  time, as well as the right to
amend or modify this  Plan  at  any  time,  and  from time to time;
provided,  however,  that   no   such   termination,  amendment  or
modification shall have the effect  of reducing a benefit hereunder
in which a Participant has become vested pursuant to Section 5.08.

     8.02.  Right to  Suspend.    If  the  Employer determines that
payments under the Plan would  have  a materially adverse impact on
the Employer's ability to  conduct  its  business, the Employer may
suspend such payments for any  period it deems appropriate, but not
in excess of one (1) year.  The Employer shall pay the total amount
of such suspended payments  immediately  upon the expiration of the
period of suspension.

     8.03.  Right to Accelerate.    The  Board  of Directors in its
sole discretion may accelerate the payment of all vested Retirement
Income Benefits upon  termination  of  the  Plan,  and may pay such
benefits  in  single  lump   sum   payments  that  are  actuarially
equivalent (determined on  the  basis  of the actuarial assumptions
set forth in Appendix A hereto) to such Retirement Income Benefits.
<PAGE>


                    SECTION 9.   MISCELLANEOUS


     9.01.  No Right to Continued Employment.   Nothing in the Plan
shall be construed as  giving  any  person employed by the Employer
the right to be retained  in  the  Employer's employ.  The Employer
expressly reserves the right  to  dismiss  any  person at any time,
with or without cause, without  liability  for the effect that such
dismissal might have upon him as a Participant in the Plan.

     9.02.  Prohibition Against  Alienation.    Except as otherwise
provided in the Plan, no right  or  benefit under the Plan shall be
subject in any manner  to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or  charge,  and any attempt to so
anticipate, alienate, sell, transfer,  assign, pledge, encumber, or
charge the same shall be void.    No such right or benefit shall be
liable  for  or  subject  to  the  debts,  contracts,  liabilities,
engagements, or torts  of  the  person  entitled  to  such right or
benefit.

     9.03.  Savings Clause.   If  any  provision of this instrument
shall be finally held by  a  court  of competent jurisdiction to be
invalid or  unenforceable,  the  remaining  provisions hereof shall
continue to be fully effective.

     9.04.  Payment of Benefit of  Incompetent.    In the event the
Committee finds that a Participant or Beneficiary is unable to care
for his affairs  because  of  his  minority,  illness, accident, or
other reason,  any  benefits  payable  hereunder  may, unless other
claim  has  been  made  therefor  by  a  duly  appointed  guardian,
committee or  other  legal  representative,  be  paid  to a spouse,
child, parent, or  other  blood  relative  or  dependent  or to any
person found by the  Committee  to  have  incurred expenses for the
support and maintenance of such Participant or Beneficiary; and any
such  payments  so  made  shall  be  a  complete  discharge  of all
liability therefor.

     9.05.  Withholding.    Benefit  payments  hereunder  shall  be
subject to  applicable  federal,  state  and  local withholding for
taxes.

     9.06.  Beneficiary's Interest.   The  interest in the benefits
hereunder of a Beneficiary of a Participant who has predeceased the
Participant shall automatically pass  to  the Participant and shall
not be transferable by such Beneficiary in any manner including but
not limited to  such  Beneficiary's  will,  nor shall such interest
pass under the laws of intestate succession.

     9.07.  Successors.  In the event of any consolidation, merger,
acquisition or reorganization of  the  Employer, the obligations of
the Employer under this Plan shall continue and be binding upon the
Employer and its successors.
<PAGE>


     9.08.  Gender, Tense and  Headings.    Whenever  any words are
used herein in the  masculine  gender,  they  shall be construed as
though they were also  used  in  the  feminine  gender in all cases
where they would so apply.   Whenever  any words used herein are in
the singular form, they shall be construed as though they were also
used in the plural form in all cases where they would so apply.

     Headings  of  Sections  and  subsections  as  used  herein are
inserted solely for  convenience  and  reference  and constitute no
part of the Plan.


                    SECTION 10.   CONSTRUCTION


     10.01.  Choice of Law.    This  Plan  shall be governed by and
construed in accordance with the laws of the State of California to
the  extent  not  superseded  by  applicable  federal  statutes  or
regulations.

               IN  WITNESS WHEREOF, MAXICARE HEALTH PLANS, INC. has
caused this Plan to be executed this 11th day of February, 1997.

                              MAXICARE HEALTH PLANS, INC.


                              By:    /s/ Peter J. Ratican
                                ______________________________

                                Its: Chief Executive Officer
                                   ___________________________


                              By:    /s/ Alan D. Bloom
                                ______________________________

                                Its: Secretary
                                ___________________________
<PAGE>

                            APPENDIX A

                       ACTUARIAL ASSUMPTIONS


Discount Rate                          7.50%

Mortality (postretirement only)        1983 Group Annuity Mortality