What is 'medical necessity'?

Imagine that we are considering whether our healthcare system (or insurer) should fund treatment or procedure X. One factor that may be cited is that of so-called 'medical necessity'. The claim would be that treatment X should be eligible for funding if it is medically necessary, but ineligible if this does not apply. Similarly, (and relevant to the debates in this special issue), if considering whether a particular treatment should be ethically and/or legally permitted, we may wish to distinguish between cases where the treatment is medically necessary, and those were it is not. But what do we mean by this concept? Here I will propose and briefly defend one plausible and practical definition.