This Note argues that the government's recovery of conditional Medicare payments should be limited to those settlement proceeds designated for past medical expenses, calling for a reconciliation of the government's financial interests and the plaintiffs compensatory interests in the tort system. Part I of this Note discusses the evolution of Medicare's and Medicaid's role as public medical insurance programs. This Part also examines the confusion regarding the extent of the government's reimbursement rights. Part II addresses the Supreme Court's recent decision in Arkansas Department of Health & Human Services v. Ahlborn, which held that Medicaid reimbursements are limited to those settlement funds intended to compensate the plaintiff for past medical expenses. Part III argues that this limited recovery rule should extend to Medicare reimbursements in light of similar language in the Medicaid and Medicare statutes, as well as the common need to balance the government's statutory rights with the tort system's compensation goals. Part IV provides a suggestion as to how courts should implement the limited recovery rule.