The american government has a commitment to the medicare age people. There was a promise made to them when they contributed to the system. So, we cannot back away from this promise. But if we slowly turn this huge ship toward the right with the coverage going for drugs. Believe me that is how CVS pharmacy, HMO, PPO deliver on their drug prescription coverage--the bid goes to the lowest bidder and then generic replacemnt of trade name drugs takes place. How do you think the insurance companies can keep up with chemotherapy, mail in prescription plans? There is mass volume. It is far cheaper to turn this ship around than to pursue a crash into financial oblivion with caring for critically ill patients. Much easier to care for the well patients than those who come in crashing b/c their diseases were not controlled. Look at AIDS. If you get on AIDS treatment early you can live a very productive life. You don't wait til your cells are so low that there is nothing to do except extraordinary measures.
First off, I completely dispute your premise that the current generation in this country are beholden to any promise to the elderly that government made four decades ago. If a current retiree actually believed some politician who promised him the moon, let him find that politician and hit him up for it. But I had nothing to do with this promise, and neither, I would imagine, did you or most other people in the country today.
Having said that, I understand the troubles that would result from an immediate dismantling of Medicare. But a gradual reduction I am in favor of. To start with, states are capable of picking up the slack, and constitutionally, it really is their role, not the federal government's. There are certainly other ways as well, as you suggested, that cuts could be initially targeted towards those who are healthy enough to bear them. But I don't think it needs to get any more complicated than that. "Retirement accounts" and various public/private partnerships that have been proposed will make things unnecessarily complicated, and ultimately will make it more difficult for the federal government to extricate itself from something it had no business being involved with in the first place.