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I am currently making payments on a ~4k loan that was paid directly to the doctor for laser eye surgery.

Can I deduct the 4k loan as a health expense? Or the payments I am making on the loan? Or nothing at all?

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You deduct expenses when you incur them (when you pay the hospital, for example). Medical expenses are deducted on Schedule A, subject to 7.5% AGI threshold. Financed or not - doesn't matter. The medical expense is deductible (if it is medically necessary), the loan interest is not.

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Right. For those reading this after 2012, the 7.5% rises to 10% in 2013. Publication 502 lists permitted medical deductions. –  JoeTaxpayer Dec 9 '12 at 1:08
    
So you deduct the amount of the bill you receive, in the year you receive it, however you arrange to pay it? –  KeithS Feb 22 '13 at 4:06
    
You deduct when you pay it. Whether you take a loan to pay it(either through financing or credit card or else) or pay it in cash - doesn't matter. –  littleadv Feb 22 '13 at 4:45

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