In a dusty warehouse of Louisville Stoneware Co., a small clay pottery company established here in 1815, Sen. John F. Kerry on Tuesday detailed his plan to reduce the cost of health coverage for small-business owners and their employees.

Addressing a small group of business owners and many of Louisville Stoneware's 63 employees, Kerry accused President Bush of ignoring a "crisis" of escalating health care costs for smaller businesses. Health insurance premiums have shot up by nearly 50 percent over the past three years for small firms, forcing many owners to scale back or scuttle coverage for employees, studies show. This helps to explain why 43 million Americans are without insurance.

"Everybody is sliding backwards," the Massachusetts Democrat said. About two-thirds of small businesses offered health plans to their employees in 2003, a slight decrease from 2000, according to the Kaiser Family Foundation.

Anthony Urbaites, president of Louisville Stoneware, and Bruce Cohen, owner of B.C. Plumbing, which employs 10 people, described how skyrocketing insurance costs are eating into profits and stifling expansion and hiring.

Cohen said that last month he was forced to increase the annual deductible for his employees to $2,500 from $500. He said his company's health care costs rose by 20 percent in 2002, 15 percent in 2003 and would have risen 17 percent more this year without the change. "Escalating costs just seem to keep escalating," Cohen said.

Kerry outlined in detail his plan to help Cohen and Urbaites.

Sometimes derided as aloof or distant from average voters, Kerry is often at his political finest in these small, intimate policy discussions. With 19 years of Senate experience, Kerry appears to impress his audiences with his mastery of policy arcana and ability to explain complicated ideas. And his answers tend to be snappier and more direct than his sometimes rambling explanations of policies in more formal stump speeches.

Urbaites and Cohen, who declined to discuss their personal politics, said they were impressed with Kerry's style and his proposals.

During the discussion, Kerry reiterated his proposal to offer small-business owners a mix of tax breaks and government assistance in exchange for their lowering the cost of health insurance for employees. Under the Kerry plan, small-business owners would get a tax credit to cover as much as 50 percent of the cost of providing coverage to employees with incomes that are not more than 300 percent of the poverty level. In 2003, a family of three making less than $45,000 and a family of four making less than $54,000 would have qualified if the Kerry plan were law, according to Sarah Bianchi, the senator's policy director.

Kerry would also allow small-business owners to buy into the same health plan that covers members of Congress and to receive a tax credit if they pick up at least half of the cost for employees. Finally, Kerry said he would seek to drive down coverage costs by taking catastrophic medical costs -- $50,000 or more -- out of the private sector and placing them on the government's tab.

All told, Kerry's plan would cost at least $650 billion, and perhaps much more, over 10 years. It is the most expensive plan Kerry will offer in this presidential campaign, aides say.

Bush campaign officials said the Kerry plan is too costly, too complicated and too reliant on the federal government. Steve Schmidt, a Bush campaign spokesman, also faulted Kerry for failing to push these programs during his 19 years in the Senate.

"America's small-business owners have a clear choice next November between President Bush's consistent support of policies to help small-business owners provide health care for their employees and John Kerry's election-year pledges that defy his own 19-year record of blocking pro-small-business policies," Schmidt said.

The president favors a plan to allow small-business owners to band together to obtain lower-cost insurance. These are called Association Health Plans. Bush also supports a different mix of tax breaks, including lower marginal tax rates on the small percentage of small businesses with incomes topping $200,000.