The Richmond Register

August 27, 2013

Hearing reveals uncertainty, worry surrounding health care law

Lectrodryer CEO testifies to members of Congress

By Sarah Hogsed
Register News Writer

LEXINGTON — The CEO of a Madison County factory told members of Congress that he feared the Affordable Care Act would lead to a deterioration of benefits for his employees as well as workers at other small businesses.

John McPhearson, who acquired control of Lectrodryer LLC with a partner in 2001, testified Tuesday morning at a Congressional field hearing in Lexington. The hearing was titled “Health Care Challenges Facing Kentucky’s Workers and Job Creators.”

Lectrodryer is the largest manufacturer of liquid dryers in this hemisphere and is the principle supplier to chemical processing plants and oil refineries, according to a news release about the hearing.

McPhearson explained during his five-minute testimony that he was in favor of all Americans having heath insurance. He said his company provides excellent health care coverage to its 63 full-time employees and pays about $3.68 an hour per employee for their healthcare coverage.

Lectrodryer also employs 70 others who are either temporary workers, co-op students or interns, McPhearson said.

However, premiums for business owners and their employees are projected to skyrocket for the next year, a trend that many are blaming on the Affordable Care Act. Most of the act’s provisions go into effect Jan. 1.

McPhearson said he has seen health insurance premium costs go up during the past 12 years while the quality of the plans have gone down. He’s afraid the trend will be exacerbated under Obamacare.

“We feel coverage will deteriorate,” McPhearson said.

He noted that the top plan that will be offered to Kentuckians through the new Health Exchange Marketplace is still not as good as what he offers his employees as Lectrodryer.

McPhearson said he was concerned that plans offered by insurance companies to individuals through the state health insurance exchange might become the “de facto” plans offered to everyone, including employers.

Another concern that McPhearson and other business owners testified about was the amount of work and uncertainty for human resource managers who have been learning how to navigate the new regulations.

McPhearson said Lectrodryer is considering hiring another human resources professional to deal with the increased workload and reporting requirements created by the Affordable Care Act.

U.S. Reps. John Yarmuth (D), Andy Barr (R), Brett Guthrie (R) – all representing Kentucky districts – and Phil Roe, a Tennessee Republican, took part in the hearing. All four congressmen serve on the House Subcommittee on Health, Employment, Labor, and Pensions.

The Republican congressmen set the tone early in the hearing, expressing their dislike of the Affordable Care Act and listing multiple ways it will negatively affect Americans and the economy.

Roe, who is the chairman of the subcommittee, said the ACA is a “fatally flawed law that will kill jobs.”

“It is clear cracks in Obamacare are growing and getting deeper,” Barr said.

Barr said his stance on the legislation was not partisan, and several audience members who support the legislation erupted in laughter and boos.

Roe called for order and explained that a congressional hearing is not like a town hall where the crowd can verbally interact with the politicians. Formal House rules of order must be followed.

Roe had to forcefully remind the crowd to quiet down several times during the first 20 minutes of the hearing. He said disruptive audience members could be removed or arrested although that did not happen at this hearing.

The lone Democratic congressman, Yarmuth, voiced his support of the Affordable Care Act.

“Far from being a job destroyer, there’s evidence (the ACA) is a job creator,” Yarmuth said. “ … The ACA is putting customers back in charge of their health care.”

Sarah Hogsed can be reached at or 624-6694.