When may a consumer incur a late enrollment penalty for a Medicare Advantage plan?

The correct answer is based on the concept of credible drug coverage and its implications for late enrollment penalties in Medicare. A consumer may incur a late enrollment penalty for a Medicare Advantage plan if they did not have credible drug coverage for 63 consecutive days or more. Credible drug coverage refers to prescription drug coverage that is at least as good as the standard Medicare prescription drug coverage. If a person goes without this coverage for the specified period, when they eventually enroll in a Medicare drug plan or a Medicare Advantage plan that includes drug coverage, they will face a penalty that increases their monthly premium.

This penalty is meant to encourage individuals to maintain continuous coverage and avoid gaps that could lead to increased healthcare costs. Not having credible drug coverage for more than 63 days means a person was at risk of high prescription drug costs during this time, which Medicare seeks to mitigate through penalties for late enrollment.

Other options relate to aspects of Medicare eligibility and coverage requirements but do not specifically address the late enrollment penalty linked directly to drug coverage.