"It turned the entire amount ($7,500) into taxable"
Are you saying that you received a 1099-SA for $7,500? If so, what did you tell TurboTax when you entered the 1099-SA and it asked you how much of it was used for qualified medical expenses? If you used it all for qualified medical expense, then none of the $7,500 should be taxable.
When you say "taxable", do you mean that $7,500 was added to Other Income on line 8 of Schedule 1 (1040)?
Did you make any contributions to your HSA since you went under Medicare? If so, when and how much?
As noted above, you cannot deduct on Schedule A any medical expenses reimbursed from your HSA. HOWEVER, TurboTax is going to subtract the HSA reimbursements from the amounts you enter on Schedule (similar to insurance reimbursement), so if you expect to be able to use medical expenses on Schedule A, you will need to enter a Miscellaneous medical expense called "HSA reimbursed expenses" with the amount of the 1099-SA at the end of the Medical and Dental interview, so that these items will zero out.
"In addition, TT says the maximum HSA contribution limit for me and my wife (married joint filing) is $0."
Because YOU went under Medicare in Nov 2020, the annual HSA contribution limit for your HSA is indeed zero. However, the annual HSA contribution limit for your spouse's HSA is $7,200 and if your spouse is 55 or above, then it's $8,200. Your spouse was under the Family HDHP plan all year, right?
Your spouse's limit is determined by the fact that your spouse had Family HDHP coverage. If your spouse changes to Self-only HDHP coverage at some point (to save on the premium), then indeed your spouse's annual HSA contribution limit would fall to $3,600 (although this is adjusted upward nearly every year). Note that the $1,000 "bonus" in the contribution limit is the same no matter which HDHP coverage you have.
NOTE: you can continue to spend from your HSA account, even though you can no longer contribute to it. Your spouse, on the other hand, can continue to contribute to your spouse's HSA.
Tell me again about this $7,500. What did you mean by "it's taxable"?
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