Are you talking the official Amazon PW cover? If you are, you can fold the cover back with no problems. I really love the cover, it's perfect!
I always read with mine folded back.
The only magnetic cover I have heard of that has that problem (where it turns off if you fold it back) is the poetic cover. This cover has that problem:
http://www.amazon.com/Poetic-SLIMLIN...tic+paperwhite
The official Amazon cover does not have that problem at all. You can also fix the problem on the Poetic cover by adding tinfoil inside opposite to where the magnet is, should you really want that cover.