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   <PAGE>  1

                       MID ATLANTIC MEDICAL SERVICES, INC.
             NON-QUALIFIED STOCK OPTION AGREEMENT FOR GEORGE T. JOCHUM

          AGREEMENT ("Agreement")  dated this ----  day of ---------,  199- by
     and between Mid Atlantic  Medical Services, Inc., a  Delaware corporation
     ("Corporation"),  and  George  T.  Jochum,  the  Chairman  of  the Board,
     President and Chief Executive Officer of the Corporation ("Optionee").

          WHEREAS, the  Corporation desires to  have Optionee continue  in its
     employ  and to  provide  Optionee with  an  incentive by  sharing in  the
     success of the Corporation;

          WHEREAS, in  order to provide such an incentive  to its officers and
     key  employees,  the Corporation  has  adopted the  Mid  Atlantic Medical
     Services, Inc. 1996 Non-Qualified Stock Option Plan ("Plan");

          WHEREAS,  the Corporation  desires to  grant  to Optionee  under the
     Plan  options not intended to qualify as "incentive stock options" within
     the meaning  of Section 422  or any successor  provision of the  Internal
     Revenue Code of 1986, as amended ("Code"); and

          WHEREAS,  unless otherwise provided  herein, capitalized  terms used
     in this Agreement shall have the meaning given them in the Plan;

          NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  and
     representations  herein contained and intending  to be legally bound, the
     parties hereto agree as follows:

          1.   NUMBER OF SHARES AND  PRICE.  The Corporation  hereby grants to
     the Optionee  an option ("Option")  to purchase the  number of shares  of
     Common  Stock set  forth on  the attached  Face Sheet of  this Agreement.
     The exercise  price per share of Common  Stock of the Option  shall be as
     is set  forth on the  attached Face Sheet  of this Agreement,  such price
     being the Fair  Market Value  per share of  Common Stock  on the Date  of
     Grant  of  the Option.   The  Option  is not  intended to  qualify  as an
     "incentive stock option" under Section 422 of the Code.

          2.   TERM AND EXERCISE.  The Option shall expire five (5) years from
     the date hereof, subject to  earlier termination as set forth  in Section
     3.   Subject  to the  provisions of  Section 3,  the Option  shall become
     exercisable  in installments as  set forth on the  attached Face Sheet of
     this Agreement.

          3.  EXERCISE OF OPTION UPON TERMINATION OF EMPLOYMENT.

               (a)     TERMINATION  OF  VESTED  OPTION   UPON  TERMINATION  OF
     EMPLOYMENT.

                    (i)   TERMINATION.    Upon the  Optionee's Termination  of
     Employment  for any reason other than for Cause (as hereinafter defined),
     the Optionee may exercise all  or any part of the Option (whether  or not
     it  was exercisable at  the date of Termination  of Employment), but only
     to  the extent not previously  exercised, until the  Option terminates in
     accordance with Section 2.

                    (ii)  CAUSE.   In the event the Optionee's  Termination of
     Employment for  Cause, the  Optionee may  exercise all or  a part  of the
     Option, but only to the extent the Option was exercisable  on the date of<PAGE>


     Termination  of Employment.   In  no event,  however, may  the  Option be
     exercised later than the expiration date described in Section 2.<PAGE>


     <PAGE>  2

                    (iii)   DEFINITION OF CAUSE.  "Cause" means (A) failure or
     refusal by  the Optionee  to perform his  duties in  accordance with  his
     Employment Agreement with the Corporation, including without  limitation,
     the  duty to keep  the Board or  the Board of  Directors of MD-Individual
     Practice Association, Inc. adequately  informed and to submit to  each of
     such Boards such written  reports as it may  reasonably require; (B)  any
     material act of  self-dealing between the Optionee and  the Corporation's
     business that  is not disclosed in  full to, and approved  by, the Board;
     (C) misrepresentation of  the performance and affairs  of the Corporation
     and   other   matters   affecting   the   Corporation;   (D)   deliberate
     falsification by the  Optionee of any  records or  reports; (E) fraud  on
     the  part of the Optionee; (F) theft, embezzlement or misappropriation by
     the  Optionee of  any funds  of  the Corporation,  or  conviction of  the
     Optionee for  any felony; (G)  execution by the Optionee  of any document
     transferring  or  creating  any  material  lien  or  encumbrance  on  any
     property  of the Corporation without  authorization of the  Board; or (H)
     refusal  to  submit   to  such  reasonable  periodic  examinations  by  a
     physician  or  medical  group  as  may  be  mutually  acceptable  to  the
     Corporation and  the  Optionee (or  his  legal representative)  upon  the
     reasonable request of the Corporation  and at its expense, or refusal  to
     make available to the Corporation the results of such examinations.

               (b)    TERMINATION  OF  UNVESTED  OPTION  UPON  TERMINATION  OF
     EMPLOYMENT.  Except as provided in  Section 3(a)(i), to the extent all or
     any  part of the Option was not exercisable as of the date of Termination
     of  Employment, the unexercisable portion  of the Option  shall expire at
     the date of such Termination of Employment.

               (c)    CHANGE OF  CONTROL.    Notwithstanding anything  to  the
     contrary in Section  2 or this Section 3, in the  event one of the events
     specified in  Section 8.05(d)(i), (ii), (iii) or (iv) of the Plan occurs,
     the  provisions of such Section  8.05(d) shall determine  when the Option
     becomes exercisable, when it may be exercised and when it expires.

          4.    EXERCISE  PROCEDURES.   The  Option  shall  be exercisable  by
     written  notice to  the  Corporation,  which  must  be  received  by  the
     Secretary of the Corporation not  later than 5:00 P.M. local time  at the
     principal executive office of  the Corporation on the expiration  date of
     the  Option.   Such written  notice  shall set  forth (a)  the  number of
     shares of Common Stock being purchased, (b) the total  exercise price for
     the  shares of  Common Stock being  purchased, (c)  the exact  name as it
     should appear on the stock certificate(s)  to be issued for the shares of
     Common Stock  being purchased,  and (d)  the address  to which  the stock
     certificate(s) should be  sent.  The exercise  price of shares  of Common
     Stock purchased upon exercise of the Option shall be paid  in full (a) in
     cash,  (b) by  delivery to  the  Corporation of  shares  of Common  Stock
     (which shares  of  Common Stock  must have  been held  for  at least  six
     months), (c)  in any combination of  cash and shares of  Common Stock, or
     (d)  by delivery  of  such other  consideration  as the  Committee  deems
     appropriate and in compliance  with applicable law (including  payment in
     accordance   with  a  cashless  exercise  program   under  which,  if  so
     instructed  by the  Optionee,  shares  of  Common  Stock  may  be  issued
     directly to  the Optionee's broker or dealer upon receipt of the exercise
     price  in cash from the broker or dealer).   In the event that any shares
     of Common Stock  shall be transferred to  the Corporation to  satisfy all
     or any part of the exercise price, the part of the exercise price  deemed
     to have been  satisfied by such transfer of shares  of Common Stock shall
     be equal to the product  derived by multiplying the Fair Market  Value as<PAGE>


     of the  date  of exercise  times the  number of  shares  of Common  Stock
     transferred to the Corporation.   Any shares of Common  Stock tendered in
     payment  shall be duly endorsed  in blank or accompanied  by stock powers
     duly  endorsed  in  blank.    The  Optionee  may  not  transfer   to  the
     Corporation  in  satisfaction of  the exercise  price  any fraction  of a
     share of Common Stock, and  any portion of the exercise price  that would
     represent less than a full share of Common Stock must be  paid in cash by
     the  Optionee.   Subject  to  Section  8  hereof,  certificates  for  the
     purchased  shares of  Common Stock will  be issued  and delivered  to the
     Optionee as soon as practicable after the receipt of such  payment of the
     exercise  price; PROVIDED, HOWEVER, that  delivery of any  such shares of
     Common  Stock shall  be deemed  effected for  all purposes  when  a stock
     transfer agent of the Corporation shall have deposited such  certificates
     in the  United States mail,  addressed to  Optionee, at  the address  set
     forth on  the last  page of this  Agreement or  to such other  address as
     Optionee  may from  time to  time designate  in a  written notice  to the
     Corporation.  The Optionee  shall not be deemed  for any purpose to be  a
     shareholder of the  Corporation in respect of any  shares of Common Stock
     as  to  which  the  Option  shall  not  have  been exercised,  as  herein
     provided, until such shares of Common Stock have been  issued to Optionee
     by the Corporation hereunder.<PAGE>


     <PAGE>  3

          5.  PLAN PROVISIONS CONTROL OPTION TERMS;  MODIFICATIONS. The Option
     is granted pursuant and subject to the terms and conditions  of the Plan,
     the  provisions of  which are incorporated  herein by reference.   In the
     event any  provision of  this Agreement  shall conflict  with any of  the
     terms  in the Plan as constituted on the  Date of Grant, the terms of the
     Plan  as constituted  on the  Date  of Grant  shall control.    Except as
     provided in  Section 8.05 of the  Plan, the Option shall  not be modified
     after the Date  of Grant except by express written  agreement between the
     Corporation  and   the  Optionee;   PROVIDED,  HOWEVER,  that   any  such
     modification (a)  shall not be inconsistent  with the terms  of the Plan,
     and  (b) shall  be approved by  the Committee.   No  modifications may be
     made  to the Option while the Optionee is subject to Section 16(b) of the
     Exchange Act except in compliance with Rule 16b-3.

          6.   LIMITATIONS ON  TRANSFER.   The Option may  not be  assigned or
     transferred other than  by will, by the laws  of descent and distribution
     or  pursuant to a  qualified domestic relations  order as  defined by the
     Code, Title I of ERISA or the rules thereunder.

          7.   TAXES.    The Corporation  shall be  entitled  to withhold  (or
     secure payment  from the Optionee in  lieu of withholding)  the amount of
     any withholding or other  tax required by law to  be withheld or paid  by
     the  Corporation  with respect  to any  shares  of Common  Stock issuable
     under  this Agreement, and the  Corporation may defer  issuance of shares
     of Common  Stock upon the  exercise of the Option  unless the Corporation
     is indemnified to  its satisfaction  against any liability  for any  such
     tax.  The  amount of such withholding or tax  payment shall be determined
     by the Committee  or its delegate and shall be payable by the Optionee at
     such  time as the Committee determines.   The Optionee may satisfy his or
     her tax withholding obligation by the payment of cash to the  Corporation
     and/or by  the withholding from the Option, at the appropriate time, of a
     number of shares  of Common Stock sufficient, based  upon the Fair Market
     Value of such  shares of Common  Stock, to  satisfy such tax  withholding
     requirements.     The  Committee   shall  be  authorized,   in  its  sole
     discretion, to establish such  rules and procedures relating to  any such
     withholding  methods as  it  deems necessary  or appropriate,  including,
     without  limitation, rules and  procedures relating to  elections to have
     shares of Common Stock withheld upon exercise of the Option  to meet such
     withholding obligations.

          8.  NO  EXERCISE IN VIOLATION  OF LAW.   Notwithstanding any of  the
     provisions of this Agreement, the  Optionee hereby agrees that he or  she
     will not exercise  the Option  granted hereby, and  that the  Corporation
     will  not  be obligated  to  issue  any shares  of  Common  Stock to  the
     Optionee  hereunder,  if the  exercise thereof  or  the issuance  of such
     shares of Common  Stock shall constitute a  violation by the Optionee  or
     the  Corporation  of  any  provision of  any  law  or  regulation of  any
     governmental authority.   Any  determination  in this  connection by  the
     Committee shall be final, binding and conclusive.

          9.    SECURITIES  LAW COMPLIANCE.    The  Optionee  agrees, for  the
     Optionee  and his  or her  Beneficiaries, with respect  to all  shares of
     Common Stock acquired  pursuant to the  terms and conditions of  the Plan
     and the Option  (or any other shares of Common Stock issued pursuant to a
     stock dividend or  stock split thereon or  any securities issued  in lieu
     thereof or in substitution  or exchange therefor), that the  Optionee and
     his or  her Beneficiaries  will not sell  or otherwise  dispose of  these
     shares except pursuant  to an effective registration  statement under the<PAGE>


     Securities  Act  of  1933,  as  amended  (the  "Act"),  or  except  in  a
     transaction  that,  in the  opinion of  counsel  for the  Corporation, is
     exempt from registration under  the Act.  Further, the  Corporation shall
     not be required  to sell or issue any shares under  the Option if, in the
     opinion  of  the  Corporation, (a)  the  issuance  of  such shares  would
     constitute  a violation  by  the  Optionee  or  the  Corporation  of  any
     applicable  law  or regulation  of any  government  authority or  (b) the
     consent  or approval of any  governmental body is  necessary or desirable
     as condition of, or in connection with, the issuance of such shares.

          10.  ADJUSTMENTS.   The existence of the Option  shall not affect in
     any way  the  right or  power  of the  Corporation  or its  directors  or
     shareholders   to   make   or   authorize   any   or   all   adjustments,
     recapitalizations,   reorganizations,    or   other   changes    in   the
     Corporation's  capital  structure  or  its  business, or  any  merger  or
     consolidation of the Corporation,  or any issuance of  bonds, debentures,
     preferred  stock  or prior  preference stock  ahead  of or  affecting the
     Common Stock or the rights  thereof, or dissolution or liquidation of the
     Corporation, or any  sale or transfer of all or any part of its assets or
     business, or any other corporate act or proceeding, whether  of a similar
     character or otherwise.<PAGE>


     <PAGE>  4

          11.   DISPUTE RESOLUTION.   As a condition  of granting  the Option,
     the Optionee agrees, for the Optionee and his or her  Beneficiaries, that
     any  dispute or disagreement  that may arise  under or as  a result of or
     pursuant to  the Plan and the Option shall be determined by the Committee
     in its  sole discretion, and any  interpretation by the  Committee of the
     terms of the Plan and Option shall be final, binding and conclusive.<PAGE>


     <PAGE>  5

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

     ATTEST:                         MID ATLANTIC MEDICAL SERVICES, INC.



     --------------------------      By:-------------------------------
                                        Joseph L. Guarriello,
                                        Executive Vice President,
                                        General Counsel and
                                        Secretary



                                     By:-------------------------------
                                        Member of the Compensation
                                        Committee


     WITNESS:                        OPTIONEE



     --------------------------      ----------------------------------
                                     George T. Jochum<PAGE>


     <PAGE>  6

                                 FACE SHEET

     Notice Addresses:

          Optionee:
                         George T. Jochum
                         4 Taft Court
                         Rockville, Maryland  20850

          Corporation:
                         Mid Atlantic Medical Services, Inc.
                         4 Taft Court
                         Rockville, Maryland 20850
                         Attention:  Secretary


     Grant Date:  --------------------                 

     Total Options Granted:  -------------- 

     Exercise Price per share of Common Stock:  $-----------

     Vesting Schedule:

                                         Number of Shares
          Date                           (Non-Cumulative)
          ----                           ----------------
       06/01/1997                           ----------
       06/01/1998                           ----------
       06/01/1999                           ----------

     Expiration Date:

          Optioned shares must  be purchased  within five (5)  years from  the
     date of  grant,  which is  -----------.   That is,  all  options must  be
     exercised by --------------.<PAGE>