The question of whether employees in church-affiliated organizations should receive contraceptive benefits is not a moral issue. It's a civil rights issue.
You might expect the Catholic Bishops to recognize an Inquisition when they see one. But listening to their laments about the administration's "unprecedented assaults" on religious liberty, you'd think Barack Obama was the second coming of Torquemada. Reasonable people will differ about the justice or wisdom of requiring church-affiliated employers to include contraceptive coverage in employee health insurance plans, but only unreasonable ones will regard this requirement as the coup de grace of religious liberty. Churches are exempt from the obligation to provide reproductive health care coverage; the requirement applies instead to affiliated hospitals, schools, and other institutions that generally receive public support to employ and serve religiously diverse members of the general public.
What accounts for the rhetorical excesses of the Catholic Church and its advocates on the campaign trail and in the media? They reflect some genuine outrage, no doubt. But, in part, the rhetoric is an organizing tool (which may succeed in wresting new concessions from the administration). And in part, it reflects larger rhetorical trends: We inhabit a culture of hyperbole, especially during election years. Every argument is a gunfight (to which someone mistakenly brings a knife), every gunfight is a war, and every war a potential apocalypse.
Still, while the fate of American civilization doesn't depend on this debate about the obligations of church-affiliated institutions to abide by secular law, the stakes are relatively high. As government workers are laid off and government programs shrink, the public role of private, tax-exempt non-profits expands. The stronger their right to dispense public funds and deliver public services according to sectarian religious dictates, the weaker our rights to a non-sectarian public sphere. It's a zero-sum game.
Non-sectarianism may lose out in the end, regardless of the unpopularity of some sectarian ideals (in this case, opposition to birth control). The desires that drive people to behaviors that their religious leaders deem sinful don't generally drive support for eradicating the very concept of sin. Eliminate sin, after all, and you'd eliminate the pleasure, and perhaps the possibility of redemption. And despite the emergence of a coherent non-theist movement, religiosity (in approved forms) remains essential to prevailing concepts of patriotism -- and, with few exceptions, to political success in state or federal elections. (This is not only the case in Republican primaries, where the non-existent threat of a "secular, socialist America" looms large.)
Reproductive choice has been an obvious casualty of sectarianism. State and federal laws impose dramatic, direct limitations on abortion rights. Conscience clauses allow pharmacists and physicians to refuse medical treatment, even when a patient's life is at stake. This right of refusal is defensible -- so long as it's accompanied by an obligation of the pharmacy or health care facility to ensure that that there are always other providers on the premises willing to dispense contraception and perform elective or medically essential abortions.
But conscience or refusal clauses are also reminiscent of policies allowing white-only hospitals to refuse treatment to black patients, or accommodations to black travelers, in the segregated South. What if belief in segregation were an article of faith, a matter of conscience, for some? (Some clergymen once defended slavery.) I'm not comparing opposition to birth control with racism, much less slavery. I'm simply pointing out that religious beliefs can, and often do, conflict with civil society and individual rights.
Would we tolerate a religious right to refuse treatment or accommodation on the basis of race as readily as we tolerate a religious right to refuse reproductive health care? Of course not. Your right to act on your religious beliefs is not absolute; it's weighed against the rights that your actions would deny to others. Today, and perhaps for the foreseeable future, claims of religious freedom tend to outweigh claims of reproductive freedom. But that is a consequence of history, politics, and culture and is subject to change. The balance of power is not divinely ordained.