When psychotherapist Anne Davis moved from Colorado back to Michigan after two decades of counseling homeless people and mental health patients, the state made her wait more than a year before she could return to work — even though Michigan faces a critical shortage of mental health professionals, according to an August 5, 2026 article by the Mackinac Center for Public Policy that originally appeared in the Washington Post. The delay illustrates how state-by-state occupational licensing laws block qualified professionals from working and prevent people from accessing needed services.
More than 3 million Michigan residents live in communities that lack sufficient mental health professionals, according to the National Alliance on Mental Illness. The state's licensing regulations have made it difficult to address these gaps. Michigan isn't part of the nursing compact, which means nurses trained there hold credentials less valuable than they should be, while nurses from Indiana have less incentive to relocate to Michigan. Though Michigan participates in the Interstate Medical Licensure Compact for physicians, a sunset clause in the authorizing law nearly caused roughly 8,000 doctors who live or work in the state to lose their licenses before legislators eliminated the provision at the last minute in March. More than half of U.S. states have adopted some form of universal recognition for out-of-state licenses, with the Archbridge Institute awarding "gold medals" to 10 states — including Michigan's neighbors Indiana and Ohio.
The report argues that recognition of out-of-state licenses by Michigan is "arbitrary and convoluted" across dozens of professions. These obstacles make it harder for state residents to find therapists or schedule dental appointments, leaving them with fewer options and higher prices because of reduced competition. The article states it "makes little sense" that professionals like massage therapists, dentists and cosmetologists must undergo new training or testing simply because they've relocated, even after working safely and successfully for decades.
Though occupational licenses are meant to protect the public, these barriers function as straightforward protectionism, benefiting professionals already working in covered industries who face less competition when licensing rules make it harder for out-of-state practitioners to move in. The same dynamic plays out across multiple industries, which frequently lobby for strict licensing requirements. Piecemeal solutions like state-specific compacts create confusion, delays and rushed legislative corrections. Licensed professionals in good standing are unlikely to move somewhere that forces them to repeat training, wait months for officials to compare nearly identical credentials or stop serving longtime patients — one potential factor in why Indiana and Ohio are performing better economically.
Michigan lawmakers are developing a solution, with several proposals advancing through the state legislature. One bill would expand reciprocity, while a more thorough package would essentially establish universal reciprocity. The report recommends that Michigan adopt a straightforward principle: if another state has already licensed someone who has practiced safely for years, licensing boards should recognize that accomplishment. The article emphasizes this isn't just Michigan's problem — automatic license recognition helps states compete for workers, expand healthcare access and make it easier for families to relocate. Lawmakers should stop treating state borders as obstacles to honest work.