Description: Research report sponsored by SOA to model and compare projected costs of different proposals for a Medicare prescription drug coverage plan. 3 types of costs are studied: net benefit cost estimates per member per month, continuance table data, and projected annual costs to the government over 10 years for two selected plan designs.

Description: This paper is about a concept known as the 'rate of transmission of information' or, more simply, as the 'information rate.' The authors establish the equivalence of arbitrage-free economic systems and a generalized betting model in such a way that the interpretation of the information rate, as the maximum rate of increase of an investor's capital, is preserved. As a corollary to this result, they show that the difference in the information rate between models represents the achievable incremental return associated with the superior predictor model. From Actuarial Research Clearing House 1993, Vol. 3.