That is correct. And the permission is unconditional on a literal summary parsing. But I think that taken together withe clause (4) regarding medicane, the statue clearly means that medicine and witholding food and water are not meant to be used as the agent of death. After all, the object is to prevent SUICIDE! ANd what we are talking about here is a patient who would go on a hunger strike to the point of death, if given a choice.
No. The object is "restricting the use of Federal funds in support of assisted suicide".