InvestigationZIP Code Lottery: Why Your Medicare Costs Depend on Where You Live
Published February 2026 · 15 min read
Key Finding
Medicare pays an average of $120.6K per provider in Florida — but just $17.6K in American Samoa. That's a 7x difference within the same federal program.
The Geography of Medicare Money
City-Level Analysis
Our geographic analysis of 500 cities reveals Houston as the #1 Medicare city at $9.2B in total billing — more than many entire states.
Medicare is a federal program with uniform rules. But the money flows very differently depending on geography. Florida, California, New Jersey, and Nevada consistently top the charts for per-provider payments. States with smaller, rural populations fall far behind.
This isn't just about cost of living. Florida's per-provider payments are high partly because of its large elderly population, but also because of its historic role as a fraud hotspot. Miami-Dade County has been called the “Medicare fraud capital of America” — a designation backed by decades of DOJ investigations and billion-dollar takedowns.
The Florida Problem
Florida is Medicare's second-largest market — $80.4B over the decade, with 666.6K providers. Per provider, Florida pays $120.6K — among the highest in the nation.
Miami-Dade in particular has been a magnet for Medicare fraud schemes. Home health fraud, durable medical equipment scams, and compounding pharmacy schemes have all centered in South Florida. The DOJ's Medicare Fraud Strike Force has made Miami its primary base of operations since 2007.
It's not that every Florida provider is fraudulent — far from it. But the concentration of elderly residents, combined with a permissive business environment, has created conditions where fraud flourishes alongside legitimate care.
The Rural-Urban Divide
Urban providers earn $20.5K more per provider than their rural counterparts. Urban areas also have 8.1M more providers, creating a massive access gap for rural Americans.
The per-service gap tells a similar story: urban providers are paid $96.11 per service compared to $81.76 in rural areas. Rural patients get less access and their providers get paid less for the same work.
Cost Per Service: A Different Map
When we look at cost per service instead of per provider, the map shifts. Kansas leads with an average of $138.07 per service, while states like Vermont and New Hampshire pay around $51.28. This reflects differences in the types of services delivered — states with more expensive procedures and drug administrations have higher per-service costs.
The Biggest Markets
In raw dollars, California ($93.2B), Florida ($80.4B), and Texas ($62.9B) account for over a quarter of all Medicare spending. These three states alone spent more than the next seven combined.
What This Means for Patients
Medicare is supposed to be a universal program. But the reality is that your ZIP code determines how many providers are available, how much they're paid, and how much fraud surrounds the system. A Medicare beneficiary in Miami lives in a completely different healthcare economy than one in rural Montana.
Geographic adjustment is one of Medicare's most contentious policy debates. Should rural providers get paid more to attract talent? Should high-cost states face more scrutiny? The data doesn't give easy answers — but it makes the questions unavoidable.