U.S. Health Care
The compromise aims to tamp down ire among Catholic officials that the Affordable Care Act rule on contraception coverage would force religiously-affiliated organizations to violate church teaching. REUTERS

The Obama administration is backing down from a rule for health insurance plans covering contraceptives after the Catholic bishops trashed the policy as an encroachment on religious liberty.

The new policy that would allow women who work in religiously-affiliated institutions to get coverage of contraceptive services directly from the insurance company, instead of their employer, sources told Reuters.

The Obama administration is seeking to quell a firestorm from Catholic Church leaders, Republicans and others who have said the regulation is an attack on religious freedom, Reuters reported.

The proposal will aim to show flexibility toward religious organizations that have criticized the policy, but will preserve the central White House goal of ensuring that women employees of religious institutions, including schools and hospitals, receive full coverage of contraceptives in health insurances plans.

The compromise, to be formally unveiled by President Barack Obama, seeks to accommodate religious organizations outraged by a new rule that would have required them to offer free contraceptive coverage, Reuters reported Friday.

The scrapped rule, proposed as part of the 2010 health care reform law, would have required religious organizations such as hospitals and colleges to offer its employees insurance plans that cover basic preventative care, including birth control and the morning-after pill.

Churches were exempt from the rule, but bishops felt that mandating Catholic affiliated organizations offer insurance plans that provide contraceptive services without copay violated church teaching. Republican presidential candidates and GOP leadership in Washington have turned the original policy into a wedge issue, bashing Obama as an enemy of religious freedom. Even Democratic senators and candidates backed off from the policy.

The new proposal was first reported by ABC News.

Several prominent Catholic leaders have indicated in recent days that they are in no mood to compromise and will not accept anything short of the Obama administration withdrawing the regulation, which was finalized last month and is part of the administration's 2010 healthcare overhaul, Reuters reported.

(Additional reporting by Reuters Staff Writers Susan Heavey and Vicki Allen.)