Women will have access to free preventive care that includes contraceptive services, but if a women's employer objects to birth control for religious reasons "the insurance company will be required to reach out and offer the woman contraceptive care free of charge," Obama said in a statement.
The policy on birth control access has been criticized by Republicans and the Catholic Church. GOP leaders vowed to reverse the new policy that requires religious institutions such as schools and hospitals provide contraceptive coverage for their employees as an attack on religious freedom.
Religious organizations won't have to pay for the contraceptive services and "no religious organization will provide [contraceptive] services directly," Obama said, but the services still will be available to women who work at these institutions.
The direction protects religious freedom while directing free preventive healthcare "won't discriminate against women," the president said, noting that several states already have this accommodation.
Obama said he thought the year's lead time for the rule to be effective was enough time to work with religious leaders to resolve conflicts. But the uproar that reached a fevered pitch this week forced a change.
The president noted that many people raised "genuine concerns" during the past two weeks but some turned the situation of "sorting through some very complicated issues" into a "political football."
"I've been confident from start we could work out sensible approach," Obama said, but others have treated the situation "as another political wedge issue. … I certainly never saw it that way."
The current rule, proposed last summer as part of the new healthcare law then confirmed in January, requires employers to provide female employees a range of contraceptive coverage, including birth control, the so-called morning-after pill and sterilization services.
While exempting churches, the rule covers religiously affiliated schools, charities, post-secondary institutions and hospitals. Catholic leaders say requiring Catholic-run institutions to provide such insurance plans violate their teachings against birth control.
Meanwhile, a bill introduced in the Senate would allow religious groups avoid including birth control coverage in their healthcare plans if it violates their beliefs.
The Religious Freedom Restoration Act would forbid the federal government from requiring any religiously affiliated non-profit organization to include contraceptive or sterilization methods if the purchaser opposed it for religious or moral reasons, sponsors Sens. Joe Manchin, D-W.Va., and Marco Rubio, R-Fla., said.
"Under our Constitution, religious organizations have the freedom to follow their beliefs, and government should honor that," Manchin, who is up for re-election, said in a statement.
"I hope President Obama will realize what a gross government overreach this is and change his mind on this mandate, but if he doesn't, Congress should act," Rubio said in a statement.