you could go forward with the rest of sixth form and make sure you reference the medical circumstances in your extenuating circumstances section/your reference so that unis can take it into account when looking at your application. however retaking year 12 wouldn't damage your chances that much to be honest, especially considering you have very concrete reasons for having to retake. if you know which universities you want to apply to, give the admissions team a call and explain your circumstances clearly and they will be able to give you advice. similarly, i'd have a chat with your head of sixth form so that they can help weigh up your options. personally, if i were you, i'd retake to get better grades overall but don't make any decisions before fully informing yourself about the pros and cons of each option