Regret in health insurance post‐purchase behavior

• Published date: 01 July 2019
• Date: 01 July 2019
• Author: E. Tice Sirmans,Patricia H. Born
• DOI: http://doi.org/10.1111/rmir.12120

© 2019 The American Risk and Insurance Association

Risk Manag Insur Rev. 2019;22:207–219. wileyonlinelibrary.com/journal/rmir

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DOI: 10.1111/rmir.12120

FEATURE ARTICLE

Regret in health insurance post‐purchase

behavior

Patricia H. Born

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E. Tice Sirmans

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Midyette Eminent Scholar in Risk

Management and Insurance, Department

of Real Estate and Legal Studies, Dr.

William T. Hold/The National Alliance

Program in Risk Management and

Insurance, Department of Risk

Management/Insurance, College of

Business, Florida State University,

Tallahassee, Florida

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Department of Finance, Insurance, and

Law, College of Business, Illinois State

University, Normal, Illinois

Correspondence

Patricia H. Born, Real Estate and Legal

Studies, Dr. William T. Hold/The

National Alliance Program in Risk

Management and Insurance, Department

of Risk Management/Insurance, College

of Business, Florida State University,

Tallahassee, FL 32306.

Email: pborn@business.fsu.edu

Abstract

Unlike other forms of insurance, individuals with health

insurance generally expect to make claims through the

policy period. Selecting an appropriate level of cost‐sharing

is difficult and individuals may, ex‐post, regret the choice of

aless‐than‐suitable coverage amount. Using a national

health insurance survey of private market consumers from

2013 to 2017, we evaluate the potential for post‐purchase

regret in the health plan purchasing decision. We employ

an ordered logistic model and find that consumers whose

plan choices were likely financially dominated by a foregone

alternative are significantly more likely to express regret

through reporting significantly lower likelihood of renewal,

even when controlling for confounding considerations

including affordability, self‐assessed risk, and satisfaction

with the plan.

KEYWORDS

disappointment, health insurance, regret theory

JEL CLASSIFICATION

D81; G22; I13

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INTRODUCTION

The health insurance purchase decision is complicated and, on average, misunderstood by

consumers (Loewenstein et al., 2013). Unlike other forms of insurance, it is more likely that an

individual will make a claim during the year than not, thus increasing the importance of

particular insurance contract parameters, such as their access to specific health‐care providers.

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In 2016, 84.6% of the population had contact with at least one health‐care professional (Centers for Disease Control and Prevention, 2016).