Isolation in the extreme can be unhealthy, this is a fact but it all depends on what you are calling isolation. Also depends on the needs of the person in question too. For some people their threshold for this is far lower than for others. For example cutting off someone that has tendencies to need a lot of interaction can be a very bad thing but someone that is accustomed to being alone or actually enjoys alone time, it would not be such a huge factor.

I think the question to ask yourself is what is it that you need? Are you feeling you are missing something by way of social interaction or is this just an assumption that being alone is a bad thing in general? I am going to assume that you're not locked in a room with no windows or anything and have a level of freedom to get out. Tell me whether I'm wrong on this, but even if they bar you from joining groups or what not, it does not mean that you can't go out and find people to meet, make friends and such. Granted it's not necessarily as simple as I say. For someone like me, just finding those places is hard but the truth is, I do have the freedom to at least get out and do so.

Get out of the house, go places, walk etc.. (unless you're in very rural area then there's a problem)