Homer Wells, an orphan, grows up in a Maine orphanage directed by kindly, avuncular Dr. Wilbur Larch. Homer is returned twice by foster parents; his first foster parents thought he was too quiet and the second parents beat him. Dr. Larch is addicted to ether and is also secretly an abortion provider. Conditions at the orphanage are very sparse, but the children are treated with love and respect, and they are like an extended family. Each night before they go to sleep, Dr. Larch says, "Goodnight you Princes of Maine, you Kings of New England!" as both encouragement and a kind of blessing.
Homer, the oldest among the orphans, is very bright, helpful and even-tempered, so Larch trains him in obstetrics and abortions as an apprentice, despite Homer never even having attended high school. Homer disapproves of abortions, and although he has been trained by Larch in the field, he refuses to perform them. After several years, Homer is very skillful and confident in performing obstetrical duties and Larch wants Homer to take over his position after he retires. But Homer finds this idea impossible, both because he lacks formal medical education and because he wants to see more of the world than just the orphanage.
Homer leaves the orphanage with Candy Kendall and her boyfriend, Wally Worthington, a young couple who work at the Worthington family apple orchard and who came to the clinic to have an abortion. While he is away from the orphanage, Homer lives on the Worthington estate in a bunkhouse called the Cider House. Wally leaves to fight in World War II. Homer is exempt from military service because Dr. Larch has diagnosed that he has a heart condition. While Wally is away, Homer and Candy have an affair. He goes to work picking apples with Arthur Rose's team. Arthur and his team are migrant workers who are employed seasonally at the orchard by the Worthingtons. When Homer reads them the rules of the Cider House that have been posted (as they cannot do so themselves), the workers observe that the rules have been made without the occupants' consent by people who do not live their lives, and so do not face their problems. Consequently, they feel that they can ignore these rules. Homer and Candy become much closer during this period of harvest and spend more time together, while Wally is in Burma fighting.
After Arthur Rose and his team come back to work at the orchard the following season, it comes to light that he has raped and impregnated his own daughter, Rose Rose, who confides in Homer after he finds out by himself that she is pregnant and experiencing morning sickness. Homer decides that he must help Rose, and agrees to perform an abortion, with Arthur's assistance. A few days later, when Rose Rose tries to run away, her father notices and goes to say goodbye; Rose stabs him and flees. Arthur then makes his own injury worse, and as a last request asks Homer and another worker to tell the police that his death was a suicide.
Wally returns from Burma a paraplegic, and although she loves Homer, Candy decides to go where she is most needed. Immediately following this decision, Homer learns that Dr. Larch has succumbed to an accidental ether overdose. Eventually, Homer decides he too should go where he is most needed and returns to the orphanage, where he is greeted joyously by both the children and staff. He is surprised to discover that he has been accepted as the new Director.
At the end of the film, Homer learns that Larch had faked his diagnosis and medical record to keep him out of the war. Larch also later made fake credentials for Homer in order to convince the board overseeing the orphanage to appoint him as the next director. Finally, Homer fills the paternal role that Larch previously held for the children of the orphanage, saying, "Goodnight you princes of Maine, you kings of New England!"

Question: Why did Homer exempt the military service?
Answer: Dr. Larch diagnosed Homer with a heart condition.
Alternative answer: He was diagnosed with a heart condition.