Bearing Reamer?

[InFlight]

Most 1.125 drills have a 1/2" shank. You simply can put that in a 1/2" collet and use it in your mill.

[s_forbes]

I don't think that this is what you're looking for, but we used this step drill bit to clean up bearing holes in our waterjetted pieces this past season. It can put a 7/8" OD hole into 1/8" thick material, or run through thicker material with a 1.125" OD hole. Just the right size for the 3/8" and 1/2" bearings we all use.

http://www.mcmaster.com/#8841a35

Step drills are cheaper than reamers, but they can wander if you are taking off a lot of material. Our gearboxes worked great, but we had padded in an extra .003" between adjacent bearing holes to prevent gears from binding if things were off. If you want tighter tolerances, you probably don't want a step drill.