Final answer:
Most health insurance plans indeed do not cover elective procedures, which are not deemed medically necessary. This is due to the structure of health financing systems such as fee-for-service and HMOs, and the concept of adverse selection may also impact insurance coverage decisions.
Step-by-step explanation:
It is true that most health insurance plans do not cover "elective" procedures. These are procedures that are considered not medically necessary and are often sought for personal or cosmetic reasons. In a fee-for-service health financing system, medical care providers are reimbursed based on the cost of services they provide. However, in Health Maintenance Organizations, or HMOs, providers receive a set fee per patient regardless of how many services are used, which may affect the allocation of resources for elective procedures. Adverse selection plays a role in health insurance, as it occurs when the insured knows more about their health risks than the insurer, leading to potential issues with the costing and provision of insurance plans.