Personally for some reason I always imagined something like Betty Davis in What Ever Happened to Baby Jane? https://www.youtube.com/watch?v=_jv0uUV2YaI crossed with the movie Deliverance https://www.youtube.com/watch?v=9gLN3QoN-q8
But that's just me.

Yes, they could lock you up against your will back then. State hospitals were scary places full of people discarded by society. The laws didn't change until the early 70's.

Or Ratso gets his legs amputated like Lt. Dan in Forrest Gump and is confined to a wheel chair for the rest of his life, but there is no way that he would be put into a hospital, homeless people that get medical treatments cannot just get locked up for life, how would they justify their illegal imprisonment and confinement?
Unless Ratso know that he had Polio or some major illness which was considered to be medically untreatable yet, because Jonas Salt had not yet discovered the cure to Polio in that era, it came later, or Ratso had another disease which he knew was fatal long term but didnt know when it would kill him during the movie, he just doesnt mention it to Joe Buck or talk about it on camera, could be why he was afraid.

I was basing my reply on Ratso saying something along the lines of "Oh, no! I'm not going to no Bellview!" I'm not saying the state hospitals in NYC are bad, but I do work in behavioral health and substance abuse and most of the people seem to give them a less than stellar review. I'm not from that area, so it's no offence to anyone who is/was a patient or employee.

State Hospital is better than living on the street in physical agony, depending on the person. It's not a prison, but a hospital.

I've wondered that myself. I thought it ranged from Rico being worried about his legs being amputated or being locked away in a horrible State Hospital for the rest of his life. He did seem to have an independent streak and I could see Ratso not wanting to lose that.