Michigan Mental Health Facilities Closing, Forcing Youth Out-of-State as State Capacity Shrinks

Michigan Youth Sent Hundreds of Miles Away for Mental Health Care

Michigan has nearly doubled its out-of-state youth mental health placements over the past decade, with families and courts increasingly sending children hundreds or thousands of miles from home because the state lacks the resources to treat them here.

According to a recent report from the Michigan Department of Health and Human Services, as of September 2026, 152 youth in Michigan's direct-placement program were living in out-of-state facilities — some as far away as Hawaii and Arizona. That number represented an increase from 122 children sent out of state in 2024 and more than double the 74 children in 2023.

Forcing a child to travel for care is like throwing them to the wolves, said Laura Marshall of Cedar Springs, whose son was sent to a Wyoming long-term treatment facility through court order. We had no control over where he was going, Marshall told Bridge Michigan.

Families say the extreme distance makes it challenging to plan visits and some facilities further limit contact. The isolation can be detrimental to their children's recovery and traumatizing for parents to endure.

State Policy Shifts and Facility Closures

The pandemic accelerated a youth mental health crisis already worsened by social media, burning out staff at treatment facilities. Amid state policy shifts and facility closures, in-state capacity has shrunk.

Michigan's MDHHS is proposing a Mental Health Framework that critics say adds bureaucracy and harms patient care. The proposal would pass individuals with mild to moderate mental health needs to private health insurance companies, disrupting a system that currently has clearly defined responsibilities under Michigan law.

The Michigan Mental Health Code outlines that Community Mental Health agencies are responsible for coordinating services, including psychiatric inpatient admissions. The proposal to shift management of certain psychiatric inpatient benefits for individuals with mild to moderate conditions to private Medicaid health plans could break the supportive relationship that currently exists between hospitals, community providers and CMH agencies.

Families Paying Out of Pocket

Holt resident Jennifer Middlin's family chose an out-of-state facility for her daughter Eleanor's mental health treatment when she was a teenager. It was the worst thing that ever happened to her, Middlin, now 20, told Bridge Michigan. It also saved her life.

The Middlins are among an unknown number of families in Michigan who pay their own way to get the help they need — their experience largely invisible in state data.

The cost of out-of-state care came out-of-pocket for the Middlins — Jennifer estimates her family spent $90,000 on her daughter's treatment. Insurance did not cover her daughter's frequent therapy sessions at the boarding school. The loans and the toll on her savings to make payments were financially devastating.

State Financial Cost

The state also carries a significant financial cost to send its youth out-of-state for treatment — it paid more than $13 million in related costs last fiscal year, with about half coming from the state. That was up from $9.7 million in 2024.

Medicaid Cuts Loom

Federal Medicaid cuts threaten to add further pressure to an already stressed mental health system. Medicaid, jointly funded by the federal government and states, covers more people with mental illness than any other public or private insurer — roughly 29 percent of the estimated 52 million nonelderly adults with mental illness, or about 15 million people.

The One Big Beautiful Bill Act signed into law by President Trump last year is projected to cut federal Medicaid spending by an estimated $886.8 billion over the next decade, largely because new work requirements will push people off the rolls.

Behavior health policy experts say the Medicaid changes will force hospital psychiatric units to provide care to many more people who do not have insurance. Even before the law, Medicaid often did not fully reimburse hospitals for the cost of mental health care, unit administrators said.

Workforce Shortages

The mental health field is also struggling with workforce shortages across states, especially in rural areas. As of December 2024, more than 122 million Americans lived in designated mental health professional shortage areas.

Dr. Arpan Waghray, a psychiatrist and CEO of Providence's Well Being Trust, noted that estimates show psychiatric units have a negative operating income of about 37 percent. We don't want to make a profit on psychiatric units, he said, adding the goal is to at least break even.

He noted that if more units are forced to shutter, that will lead to more children being sent out of state for care.

Legal and Administrative Confusion

State officials believe the rise in out-of-state placements is largely limited to court-supervised youth in the juvenile justice system, not children they directly oversee. But counties that report placement data to the state are not required to share that information, a spokesperson said.

The confusion is a symptom of a larger problem, lawmakers contend: A massive department overseeing a sprawling landscape of juvenile facilities that could lead to kids falling through the cracks or needing to seek care elsewhere because state offerings are not accessible at the time.

The liability question is really huge, because who is responsible, said State Rep. John Roth, R-Interlochen. If that kid gets seriously injured in an out-of-state facility, is it the state that they went to's problem now?

What This Means for West Michigan

For families in West Michigan, the implications are clear. When in-state facilities close or cannot provide adequate care, parents face impossible choices. They can spend tens of thousands of dollars out-of-pocket to send their children to facilities across the country, or watch their children's suffering continue without access to the treatment they desperately need.

The situation is particularly acute in rural West Michigan communities where mental health resources are already scarce. Families in Kalamazoo, Van Buren, Allegan, and Oceana counties are increasingly finding themselves in the same position as the Middlin family from Holt — navigating a system that has failed to keep pace with the growing demand for youth mental health services.

The state's proposed Mental Health Framework adds to the confusion by potentially shifting responsibility for certain services to private health plans, which may not be equipped or willing to provide the intensive care that children in crisis need.

What Can Be Done

Care providers, Community Mental Health agencies, hospitals and advocacy organizations have all raised concerns noting this proposal appears to address a relatively small number of disputes. In an attempt to reduce a few small issues between health plans, the MDHHS answer is to impose a large administrative burden on the entire mental health system, said Alan Bolter, CEO of the Community Mental Health Association of Michigan.

We are urging the MDHHS to forgo yet another pointless proposal and join with us in looking for collaborative opportunities to drive meaningful change for Michigan residents, Bolter said.

The mental health system needs resources, not bureaucracy. It needs investments in facility capacity, workforce development, and adequate reimbursement rates that allow providers to keep their doors open. Without these investments, Michigan will continue to see out-of-state placements climb, families burdened with impossible financial choices, and children sent hundreds of miles away from home for treatment they desperately need.