Based on field research of three closely integrated county-level medical communities in Guangde City, Jingde County, and Wangjiang County of Anhui Province, this study comparatively analyzes county-level practices and practical challenges of medical insurance policies in supporting the development of traditional Chinese medicine(TCM) across four dimensions: pricing mechanisms, payment methods, performance assessment orientation, and inter-departmental coordination. The study finds that institutional arrangements, such as inadequate pricing mechanisms for TCM healthcare services, the inappropriate application of medical consumable expenditure ratio assessments to Chinese herbal decoction pieces, and the adjustment to county-level outpatient reimbursement policies, have constrained the development of primary-level TCM services. The three counties exhibit distinct characteristics in preferential payment policies for TCM-advantaged disease categories, the operation of smart shared TCM pharmacies, and primary-level incentive allocation. Accordingly, the paper proposes recommendations, including improving the pricing mechanism for TCM healthcare services, optimizing medical insurance payment arrangements for TCM, establishing tailored incentive mechanisms for primary-level TCM services, and strengthening provincial-level coordination of medical insurance policies for TCM.