Since your wife is eligible to be covered through your plan at work, you can't deduct her medical premiums on Form 1040, line 29. Even though it's expensive, she is eligible, therefore she can't deduct the premiums. You can deduct her insurance premiums and all other out-of-pocket medical expenses as an itemized expense on Schedule A.
The only way to be able to deduct medical expenses as a business expense for your wife is if she set up a Section 105 medical reimbursement plan. See my article for details:
http://www.tomcopelandblog.com/2011/...eductible.html
Join me on February 9th for my webinar "2011 Family Child Care Tax Update: How to Reduce Your Taxes". For details:
http://events.r20.constantcontact.co...&llr=yatrx4cab