COOK macaroni as directed on package. Meanwhile, cut butter into small pieces and place in bottom of 13x9-inch baking dish.
DRAIN macaroni. Place half of the macaroni over butter in baking dish; sprinkle with 1 cup each of the cheeses. Beat the egg and milk with wire whisk until well blended. Pour half of the egg mixture over ingredients in baking dish. Repeat layers of macaroni, cheeses and egg mixture. Sprinkle lightly with paprika.
BAKE at 350°F for 15 min. Remove from oven; stir until well blended. Bake an additional 15 min. or until heated through and golden brown.