Shirley has a Medigap policy, which is designed to pay costs associated with:

A Medigap policy, also known as Medicare Supplement Insurance, is specifically designed to help cover the out-of-pocket costs not paid by Original Medicare, which includes Medicare Part A and Part B. These costs can include deductibles, copayments, and coinsurances that beneficiaries are responsible for after Medicare has processed the claim.

Part A covers hospital insurance, while Part B covers outpatient medical services. Since Medigap policies complement these two parts, they fill the gaps left by Medicare, making healthcare more affordable for individuals. This is why the correct answer is associated with Medicare Parts A and B. Medigap policies do not provide coverage for Medicare Part C (Medicare Advantage) or Part D (prescription drug coverage), as they are separate types of plans that serve different purposes within the Medicare framework.

Overall, the design of Medigap is to work exclusively with Original Medicare, focusing on the costs that arise from hospital stays and outpatient services, which is why it specifically relates to Parts A and B.