March 28 (Reuters) - The Biden administration on

Thursday will finalize a rule aimed at cracking down on

short-term health insurance plans and surprise medical bills,

the latest steps in its effort to lower consumer costs across a

broad range of industries.

The rule, first introduced last July, places tighter

restrictions on short-term insurance products that are supposed

to serve as a lifeline for more than 1 million Americans who

rely on stop-gap insurance, such as when switching jobs.

The Biden administration says companies exploited changes

made under former President Donald Trump that allowed

watered-down insurance plans to be offered for a much longer

period, up to three years, often resulting in surprise medical

bills,

Short-term insurance plans misled consumers into thinking

they were buying comprehensive health insurance, but included

things like low caps on benefits and no coverage for

pre-existing conditions, said Neera Tanden, who serves as the

domestic policy adviser to President Joe Biden.

"That's not really insurance. That's a scam and the

president really believes that the American people do not want

to be taken for suckers," Tanden said.

The administration of Barack Obama in 2016 limited

short-term insurance plans to three months to try to get more

people on year-round plans, but regulations adopted by the Trump

administration in 2018 allowed people to stay on such plans for

12 months and renew them for three years.

The final rule finalized on Thursday by the Department of

Health and Human Services would restrict plans to three months,

with only a short extension, Tanden said. It would also require

companies to explicitly and more clearly disclose what's covered

and what's not, she added.

U.S. inflation has fallen, job growth and spending continue

to be strong and overall the U.S. economy is performing better

than expected. But the high cost of consumer items from

groceries to housing is contributing to American voters'

concerns about Biden's economic policies.

Biden has successfully pressured companies such as Airbnb ( ABNB )

and Live Nation to limit junk fees, or extra

charges, that customers pay when booking concert tickets, hotels

and airfares. The administration has also forced credit card

customers to slash late fees, from an average of $31 down to $8.

The White House Council of Economic advisers estimates that

the administration's actions will eliminate more than $20

billion in junk fees annually.