When Elderscale Wurm enters the battlefield, if your life total is less than 7, your life total becomes 7.
As long as you have 7 or more life, damage that would reduce your life total to less than 7 reduces it to 7 instead.
7/1/2012 Elderscale Wurm’s last ability doesn’t prevent damage. It only changes the result of damage dealt to you. For example, a creature will lifelink that deals damage to you will still cause its controller to gain life, even if that damage would reduce your life total to less than 7.
7/1/2012 Elderscale Wurm’s last ability doesn’t affect the loss or payment of life.
7/1/2012 If you have less than 7 life, damage dealt to you reduces your life total as normal.
7/1/2012 If damage is dealt to you and Elderscale Wurm at the same time, and that damage is enough to destroy Elderscale Wurm and reduce your life total to 7 or less, Elderscale Wurm’s ability will still apply. For example, if you have 10 life and a spell deals 10 damage to you and 10 damage to Elderscale Wurm, you’ll end up at 7 life and Elderscale Wurm will be destroyed.
7/1/2012 In a Commander game, combat damage you’re dealt by a commander is still tracked, even if it doesn’t change your life total.