President Barack Obama announced a compromise Friday in the dispute over whether to require full contraception insurance coverage for female employees at religiously affiliated institutions.

Under the new plan, religiously affiliated universities and hospitals will not be forced to offer contraception coverage to their employees. Insurers will be required, however, to offer complete coverage free of charge to any women who work at such institutions.

Female employees at churches themselves will have no guarantee of any contraception coverage -- a continuation of current law.

There will be a one-year transition period for religious organizations after the policy formally takes effect on August 1.

"No woman's health should depend on who she is or where she works or how much money she makes." Obama said at the White House. But "the principle of religious liberty" is also at stake. "As a citizen and as a Christian, I cherish this right."

The president briefed New York Archbishop Timothy Dolan, head of the U.S. Conference of Catholic Bishops, on the decision Friday morning. He also discussed the decision with Sister Carol Keehan of the Catholic Health Association and Cecile Richards, head of Planned Parenthood.

News of the compromise came after days of escalating partisan and ideological rhetoric over the divisive issue. The White House originally wanted to require hospitals and schools with religious ties to offer full contraception coverage. Many Catholic leaders and other religious groups strongly oppose any requirement for contraception coverage on theological grounds.

The question of whether institutions with religious ties should be required to offer insurance plans covering birth control and the so-called morning after pill, among other things, hits a number of political hot buttons. Liberal groups have pushed for an expansive contraception coverage requirement on grounds of gender equality in health care. Conservatives generally consider it a violation of the First Amendment and an infringement on religious liberty.

Some political analysts believe the controversy could cost Obama votes in politically critical states like Pennsylvania and Ohio in November, while others insisted it will ultimately hurt Republicans with suburban women.

Reaction to Friday's decision fell largely along predictable party lines. Democratic leaders embraced the revised rule, while Republicans called it inadequate.

"The rule announced by President Obama today guarantees that all women will have access to free contraception coverage through their employers, while protecting the religious freedom of faith-based institutions," said Senate Majority Leader Harry Reid, D-Nevada.

"I strongly support the rule announced today because in the year 2012, women should not be denied access to contraception. ... Whether women choose to use contraception should be their decision, not the decision of their employers or politicians in Washington."

Planned Parenthood's Richards also praised the decision, arguing that "in the face of a misleading and outrageous assault on women's health," it "does not compromise a woman's ability to access these critical birth control benefits."

But conservative Rep. Jim Jordan, R-Ohio, insisted the revised rule still violates the Constitution.

"This ObamaCare rule still tramples on Americans' First Amendment right to freedom of religion," Jordan said in a written statement. "It's a fig leaf, not a compromise. Whether they are affiliated with a church or not, employers will still be forced to pay an insurance company for coverage that includes abortion-inducing drugs."

Rep. Fred Upton, R-Michigan, said the revised rule "simply pretends to shift costs away from religious employers, but it doesn't fix the problem and is another call for individuals and institutions to compromise on principle."

Upton, chairman of the House Energy and Commerce Committee, said Friday's decision guarantees congressional action on the matter.

"The Constitution does not compromise; those rights are inalienable and cannot be bartered away for political expediency and convenience," he said. "The administration has simply reaffirmed that congressional action to permanently reverse this mandate is necessary."

Published polls show a slight majority of U.S. Catholics actually favored the administration's original proposed rule. Catholic leaders were divided by Friday's announcement.

"I think (Obama's) punting, just kicking the can down the road," Miami Archbishop Thomas Wenkis told CNN. "He's hasn't really addressed our concerns. I think the only thing to do is... to take back the whole thing."