UPDATE 1-U.S. House releases healthcare overhaul bill

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WASHINGTON, July 14 (Reuters) - The healthcare overhaul proposal offered on Tuesday by U.S. House of Representatives' Democrats will include an extra 5.4 percent tax on those earning more than $1 million.

One congressional aide said that would bring the top tax rate for the wealthy to 45 percent.

The 1,000-page healthcare legislation will be considered by three House committees with an aim to finish work in the House by August.

President Barack Obama, who has made the healthcare overhaul his signature domestic policy issue, voiced his support for the proposal and said it would help control skyrocketing costs that have reached $2.5 trillion a year.

The legislation calls for an additional tax of 1 percent levied on those couples earning more than $350,000. Those with $500,000 in income would pay an extra 1.5 percent, according to the legislative documents. Increases could be triggered in 2013 to 2.0 percent and 3.0 percent, respectively. The millionaires' tax would remain at 5.4 percent, according to legislative documents.

The additional taxes would bring in $544 billion over 10 years to pay for the estimated $1 trillion cost of the healthcare overhaul, including bringing coverage to the estimated 45 million uninsured.

The cornerstone of the plan is a public-financed health insurance option that would compete with private insurers. The legislation includes subsidies to help people buy insurance, and requires all individuals to purchase insurance or face a tax penalty.

Among the sweeping changes in the health insurance industry, it would bar insurers from denying coverage to anyone based on pre-existing medical conditions. It would also cap the amount the insured would have to pay on "out-of-pocket" healthcare expenses.

Among the changes for the Medicare program for the elderly and disabled, is a focus on ways to use reimbursement rates to improve quality of care rather than reward quantity of care. The legislation would establish a commission to examine reducing disparities in reimbursements in different regions of the country.

Drug manufacturers would be required to give rebates to those eligible for Medicare and Medicaid, the health program for the poor. (Reporting by Donna Smith, Kim Dixon, and Jackie Frank; Writing by Jackie Frank; Editing by Eric Beech)