This paper presents an overview of the economic situation of elderly women in the United States. Its focus is on "illness-engendered poverty," a type of poverty that results from the inadequacies of Medicare coverage of long-term care and the subsequent need of many elderly to "spend down" into poverty in order to qualify for means-tested, publicly financed health and social programs. The consequences of Medicaid eligibility requirements and system incentives on the economic and social well-being of older women and their families are discussed.