R E C I T A L S

                                            Exhibit 10.3j

           AMENDMENT NO. 3 TO THE AMENDED AND RESTATED
            EMPLOYMENT AND INDEMNIFICATION AGREEMENT

         This Amendment No. 3 to the Amended and Restated
Employment and Indemnification Agreement dated as of April 1,
1996, as amended by Amendment No. 1 thereto dated as of February
11, 1997 and Amendment No. 2 thereto dated March 28, 1998
(collectively the "Agreement"), is made by and between MAXICARE
HEALTH PLANS, INC., a Delaware corporation (the "Company"), and
Xxxxx X. Xxxxxxx, an individual ("Executive") and is dated as of
May 8, 1998.


                         R E C I T A L S

         
         WHEREAS, Executive presently serves as Chairman of the
Board, Chief Executive Officer and President of the Company
pursuant to the Agreement, exerting particularly diligent efforts
in such capacities on behalf of the Company;

         WHEREAS, the Company has entered into an Agreement of
even date herewith (the "Xxxxx Settlement") with Xxxx X. Xxxxx,
Xx. ("Xxxxx") and certain of the Company's shareholders who
joined with Xxxxx (collectively the "Xxxxx Group") in a Written
Consent Action with respect to the Company dated March 19, 1998
(the "Consent Solicitation");

         WHEREAS, certain other shareholders, who combined with
the Xxxxx Group control in excess of 50% of the outstanding
shares of the Company, have agreed to support certain terms of
the Xxxxx Settlement which provides for the election of three new
members to the Company's Board of Directors who have been
suggested by Xxxxx or such shareholders (the "New Directors"),
the dismissal of certain pending litigation between the Company
and Xx. Xxxxx and Xx. Xxxxx'x termination of his Consent
Solicitation;

         WHEREAS, the Company and Executive wish to clarify any
ambiguities with respect to the "Change of Control" or other
provisions of the Employment Agreement raised by the election of
the New Directors to the Board; and

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

         1.   Section 1.  Definitions.  (e)  "Continuing
Directors" shall be changed to add at the end thereof the
following:




              "Notwithstanding anything to the contrary
              contained elsewhere herein or the
              definition of "Continuing Directors"


              above, neither Xxxx X. Xxxxx, Xx., Xxxxxx
              Xxxxxxx, Xxxxxx Xxxxxx, nor any other
              person initially elected to the Board of
              Directors at or before the Company's 1998
              Annual Meeting of Shareholders, pursuant
              to the terms of that certain Agreement
              dated as of May 8, 1998 between the
              Company and Xxxx X. Xxxxx, Xx. and certain
              other parties shall be considered a
              "Continuing Director" as such term is
              defined in the Agreement."

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

         IN WITNESS WHEREOF, this Amendment No. 3 to the
Agreement has been executed as of the date first above written.


EXECUTIVE                             MAXICARE HEALTH PLANS, INC.


  /s/   Xxxxx X. Xxxxxxx                  /s/   Xxxx Xxxxx        
Xxxxx X. Xxxxxxx
                                      By:   /s/ Xxxx Xxxxx        

                                      Its:   Secretary