According to Magnolia Electric Co. bandmate Jason Groth, Jason Molina "and the bottle had a complicated relationship" dating back as far as 2003. The full extent of his alcoholism was not revealed to many of his close friends until after 2009.
A European tour for Molina & Johnson in support of their self titled album was scheduled for November and December 2009; the tour was cancelled on November 23, 2009, three days before the concerts were to begin. A brief note on that band's official website blamed "health problems" (without elaborating further) for the cancellations, and noted that "Jason Molina is extremely disappointed but there is no way he can be on the road at the present time." A U.S. leg of the Molina & Johnson tour was scheduled for January and February 2010, but was cancelled in early December, with another brief note on the band's official website due to Molina's "present health issues". Following this announcement, Molina effectively withdrew from public life.
On September 19, 2011, a message from the musician's family was posted on the Secretly Canadian Records website, titled "Where Is Jason Molina?", which said that over the past two years, Molina had visited rehab facilities and hospitals in England, Chicago, Indianapolis, and New Orleans for an unnamed condition. His family wrote that at the time, he was "currently working on a farm in West Virginia raising goats and chickens for the next year or so, and is looking forward to making great music again." The note also stated that the last several years had been "a very trying time for Jason, his friends, and his family. Although no one can be sure what the future holds, we feel very encouraged by the recent steps Jason has taken on the road towards becoming healthy and productive once again." The post ended by asking fans to donate to a PayPal account that would fund Molina's recuperation.
On May 5, 2012, a post titled "a note from jason" was posted on the Magnolia Electric Co. website, explaining certain aspects of his situation for the first time. Saying that it had been "a long hospital year", Molina expressed gratitude and appreciation for the monetary and emotional support he had received from fans and friends. He gave a brief update on his condition, saying, "Treatment is good, getting to deal with a lot of things that even the music didn't want to. I have not given up because you, my friends have not given up on me." The note concludes on an optimistic tone, saying that there were a few music projects on the "distant radar screen."
Molina died on March 16, 2013, in Indianapolis as a result of alcohol abuse-related organ failure. He was 39. Henry Owings, a friend of the musician, published an article on his online music magazine Chunklet that said Molina had struggled with alcoholism for most of the decade leading up to his death. Owings also wrote that Molina had "cashed out on Saturday night in Indianapolis with nothing but a cell phone in his pocket". An authorized biography of Molina's life, titled Jason Molina: Riding with the Ghost, was released on May 15, 2017.