Medicaid spending is a "continuing, nagging problem" for North Carolina, Senate President Pro Tem Phil Berger said Wednesday, and the state Department of Health and Human Services will be challenged to get it under control.

Berger said Medicaid costs are the one thing that concerns him as lawmakers start drafting the next two-year budget, and out-of-control spending is the main reason he's skeptical about expanding Medicaid as part of the national Affordable Care Act reforms.

"We are having a great deal of difficulty understanding how, in a program that at its current level ended up with overruns in the hundreds of millions of dollars, we can reasonable afford to expand that program," he said.

Also, he said, neighboring states are unlikely to expand Medicaid coverage, which could lead to an influx of low-income people seeking medical care if North Carolina were to expand its program and would result in more cost overruns.

DHHS might have a hard time reining in spending, Berger said, because of inadequate computer systems and agency problems that have "festered for years."

Another Affordable Care Act option the state likely won't pursue is establishing its own health exchange, Berger said. States must build their own exchange, which will provide people who don't have employer-sponsored health coverage a marketplace to buy their own insurance, or use a federal exchange.

Former Gov. Beverly Perdue said in November that North Carolina would have a hybrid exchange, using a federal one to start that the state would gradually adapt and assume control over, but Berger said there was no support in the legislature for either a state-run exchange or a hybrid.