Getting a discount or sharing the cost? The influence of regulatory fit on consumer responses in private health insurance policies

Daryanto, A and de Ruyter, K and Wetzels, M (2010) Getting a discount or sharing the cost? The influence of regulatory fit on consumer responses in private health insurance policies. Journal of Service Research, 13 (2). pp. 153-167. ISSN 1094-6705

Abstract

This research examines the regulatory fit effect on perceived value and buying intentions in the context of private health insurance decisions. The so-called value-from-fit effect is assessed in conjunction with the effect of risk perceptions. Value-from-fit results from the interaction effect between regulatory focus concerns (discount vs. cost-sharing policies) and message framing (gain vs. loss). The results show that the fit effect on buying intentions is fully mediated by the perceived value of a health insurance policy and that perceived value functions as partial mediator of the effect of risk perceptions. The relative strength of the regulatory fit effect in explaining customer perceived value is small compared with the impact of perceived risk. The findings suggest that if health insurance providers wish to offer a premium discount, communicating the policy by emphasizing the benefits consumers attain from purchasing a deductible policy (i.e., getting the discount) may enhance the value of the policy. On the other hand, positioning a premium copayment policy can be more effectively done by emphasizing the costs associated with not choosing this policy.