All your points are well-taken, but I’d add two.
First, people are sitting around figuring out how to deny care to the Lebensunwerten. That’s what all the end-of-life, quality-of-life, “bio-ethics” discussion masks. It’s all put as voluntary and “compassionate” (benevolence being the mask evil wears in democratic politics); but as soon as the government which, as you point out, has a finite budget, is responsible, it’ll become mechanical policy very quickly (with waivers for the connected and Congressmen). Rahm Emanuel’s brother’s writings are a case in point. And remember the president made some remarks about how grandma might just have to settle for palliative care. Since she’s old and all.
Second, your case, while more typical, isn’t the acute problem. Your payors are both just running out the clock (which is admittedly a lot of geriatric medicine). But what happens if Grammy, at age 80, is still really spry, living independently, completely in control of her faculties, descended from a long line of centenarians, and yet needs a very expensive procedure, like an organ transplant? Nowadays, you can, with some doing, get her that procedure. Which might give her another fifteen years before she hits the running-out-the-clock scenario you mention. You and your doctors are going to be looking at the time you can realistically get her; the bureaucrat is going to be looking at what she’s costing him. What are the odds that an elderly person will be able to get that care under a technocratically managed, politically rationed system?
Don’t ask impertinent questions like that jackass Adept Lu.