Are Medical Provider taxes a threat to the economic system?

 Read:  https://market-ticker.org/akcs-www?singlepost=4249703

What are medical provider taxes? Simply, it is a tax leveled on health providers that is then used by the States to (1) evade federal requirements prohibiting health care handouts to those not here in the US legally and is used as a foil to then boost Federal Medicaid spending into those states by skewing the calculation used to compute how much each state gets in block grants.

Right now, the federal government pays about 60% of Medicaid costs and the states pay the other 40%.  In California, the split is 70% / 30%.  MCO (Medical Care Organization) tax is levided by the state on hospitals and other organizations to fund the state's share of Medicaid.  In California, this amounts to about $16 billion per year.  Total Medicaid spending in California is about $120 billion (2022 numbers).

This tax drives up the cost of healthcare for everyone not on Medicaid.  Karl Denninger sees this as an existential threat to the system.

When it comes to the medical system generally this now amounts to one dollar in five in the economy; it is not only significant it is the ENTIRE driver of the federal deficit over the last TWO DECADES and if it is not STOPPED right here and now it will destroy the Federal Budget and lead to the collapse of not just the medical system but our economy as a whole.

Got it:  the increase in medical spending will lead to the collapse of our economy as a whole.  When?