Seniors' income, benefits bring Alaska more than $1 billion a year
Retirees may no longer work but they still get paid, making them a valuable part of Juneau's economy.
"If you just look at retirement benefits, we're talking $20 million to $30 million a year," said Lance Miller, executive director of the Juneau Economic Development Council. "If you view it that way, it's a sector. It's a whole industry."
Retirees are themselves an economic base, something retirement destinations such as Florida and Arizona figured out years ago. Statewide seniors bring at least $1.2 billion in income and government medical benefits into Alaska each year, according to a 2000 study by the McDowell Group, a research firm in Juneau.
Last year Juneau seniors spent more than $6 million on general merchandise and in retail stores, $2.5 million on food, and $2.8 million on cars and gas, according to city sales tax records.
"Seniors are going to spend just like everybody else," Miller said. "The basic needs are still there. They have higher medical (costs), but food, gas and energy are the same."
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Older consumers spend three times the national average on health care, according to George Moschis, director of Georgia State University's Center for Mature Consumer Studies. They also spend more on travel, leisure and luxury automobiles.
Most don't need to make the large purchases, such as furniture, because their homes already are established.
"I haven't found too many real big spenders or collectors of expensive toys or boats," said Joe Sonneman, Juneau chapter president of AARP, a nationwide organization of people 50 and older. "Most people that I know seem to be relatively modest and just live a pretty quiet life."
But today's seniors also follow today's trends. Paul Emerson shops at Rainbow Foods for healthy, organic food.
"I found out too late in life that this is the way to go," Emerson said. "I think a lot of other older people are catching on to that too, and of course you can see in the chain stores they have these big organic food sections and ethnic foods."
Certain areas of the economy are likely to expand as more retirees stay in Juneau or move here. Miller already has had people inquire at JEDC about the possibility of opening assisted-living facilities. Bartlett Regional Hospital and other health-care providers would stay busy.
The hospital has shifted to more outpatient treatment, keeping the number of beds about the same even as the number of patients increases, said Chief Financial Officer Garth Hamlin. He expects the trend to continue, with a 5 percent growth in outpatient work while the daily bed count remains the same.
"Just as medicine advances, many of the procedures that used to be done on an inpatient basis are now done on an outpatient basis," Hamlin said.
The hospital is expanding emergency rooms and critical-care unit beds, areas frequently used by older, sicker patients. Urology, neurology and plastic surgery services are being added, Hamlin said. Obstetrics and the medical-surgical areas are not expanding.
More patients will help the hospital if their bills are paid. Seniors generally are covered by Medicare, the federal health insurance program for seniors, Hamlin said. But, he added, "Medicare typically doesn't pay as well as commercial insurance."
Instead of paying for the services actually needed, Medicare pays an amount predetermined for each official diagnosis. So the hospital is reimbursed the same for an 80-year-old struggling to recover from a broken bone as for a 12-year-old whose young bones heal faster.
"The hospital's at risk for someone who is maybe sicker and needs more resources," Hamlin said. Medicare wants "to pay less than charges, so we're not getting paid full charges on that."
Most health-care dollars are spent in the last few years - and even the last few days - of people's lives, Hamlin said. So having more people nearing the end will be expensive for the Medicare system - and Bartlett.
"A lot of whether it's a success or helpful to us depends what happens to the reimbursement side," Hamlin said. "We can provide the service, but if we're not paid very well, then it's difficult."
Taxi companies are more likely to actually reap dollars from an aging population. As people get older they often stop driving, or at least restrict the hours they drive.
"Even seniors who do still drive, they don't seem to drive at night," said AARP president Sonneman, "because as they age their eyes become sensitive to glare."
Emerson and many other seniors take the city bus or Southeast Senior Services' Care-A-Van when they can. When they can't, they call a cab. About 10 percent of the passengers Metro Taxi carries are elderly, said co-owner Russ Windom. He supported an AARP effort to get a senior discount, but the city, which controls cab prices, turned it down. AARP is trying to improve transportation options for seniors statewide through its legislative committee.
Retirees also spend generously of their time, providing the volunteer base for many of Juneau's nonprofit organizations. The McDowell study estimated senior volunteer work is worth about $60 million a year in Alaska. The time they put in as unpaid caregivers and subsistence providers equals about 9,900 full-time jobs, McDowell estimated.
"It is a growing population and it's good for a community to have a full spectrum of ages and cultures," JEDC director Miller said. "With a fairly healthy aging population they bring a lot back to the community in volunteer hours and dollars."