You had me until here. So, how do we work around this? You don't like my idea, because it involves cutting people off and I don't like yours because it costs me more money, but more importantly, means I could still end up paying for one individual for my entire life.
How do we get around this?
In my view, the ones that are left are the ones that should truly be considered disabled. They can't live and function in normal society and they recognize that. I don't mind them being a financial burden if that's truly the case, for the exact same reason I don't mind other disabilities being a burden.
That said, I'm not convinced they would actually have to be a financial burden. For one, we have the money made from the drug trade. That's at least a start. Plus, we are talking about a low number of people here. By their nature, they can't be around drugs our outside of a supportive environment. The fortunate thing is that supportive environments can be mobile. Addicts are capable of working, they just can't be responsible to manage their own affairs.
Let's say the average mental hospital would have 20 addicts (which sounds too high to me, but I'm going with it). I feel like it would be too hard for them to work community jobs in groups of 4 or 5 (plus a ward employee). Obviously, there would need to be restrictions on what they could do (as they couldn't work anywhere that would allow them to gain access to drugs). But they still have the chance to live a fulfilling life--maybe as cleaning/landscaping crews for public buildings, for example.
Would it still take public funds? I dunno. I have no way of predicting what this would cost and how much the drug taxes would bring in. But it doesn't seem like any public funds would be untoward.
Of course, there are still the people who are going to refuse to enter these facilities. Frankly, I wouldn't force them to (for my conception of the ward to work, people would need to be there by choice). Hopefully, in time, they'll recognize it's a good idea. If not, then they'll end up killing themselves.
And if the drug controls work, ODs wouldn't be a major issue for these people (especially since you could legislate such that an OD means the clinic won't provide you with drugs). So those people would be willingly choosing to live on the street and actively pushing help away. And those people exist even without drugs being a factor.
Imo, if the drug controls work (AKA, we can keep black market dealing from being profitable and available by creating public drug dispensaries), then the major part of the problem is gone. The number of ODs hospitals want to deal with drop significantly and addicts who can't control themselves have options such that they can still remain productive members of society.