The issue is that the Catholic Church is forced by government to offer contraception to women. It doesn't matter who's paying for the contraception. Obama says he will have the insurance company pay for the contraception services which will be offered by the Catholic Church through company insurance offerings because they are forced by government to offer contraception services with the insurance offerings. This doesn't solve the problem, and it only confirms that Obama is not backing down. Sebelius, Jarrett, Michelle Obama, Hillary Clinton and others on the Left, especially women, are pushing this, and Obama is right there with them. They're staking a political stand for the 2012 elections in an attempt to frame religion and the Right as against women's rights.
Whoops, I just heard that Obama says this is not a compromise -- it's an accomodation.