Try to turn on Primary Text Frame on document setup, it may help.
My recollection is that with a primary text frame and Smart Text Reflow you DON'T want to hold the shift key when placing, too.
Thank you for your responses. Primary text frame is checked and grayed out on the document setup window. Oddly new pages do not have a text frame that can be selected on the document I am working on. Any thoughts on what might be causing this? Still trying to resolve the issue.