Preheat oven to 350°F.
Prepare pasta according to package directions. Drain.
Place macaroni in a large bowl.
Place 2 tablespoons butter in large saucepan. Place pan over medium-low heat and melt the butter.
Whisk in flour. Cook, whisking constantly, 3 minutes.
Gradually whisk in milk.
Stir in onion, bay leaf and paprika. Simmer gently, stirring often, for 15 minutes.
Remove from heat. Stir in 1 1/2 cups cheese.
Taste. Add salt and pepper, to taste.
Remove bay leaf.
Stir in macaroni.
Pour half of mixture into greased, deep 1 1/2-quart baking dish.
Sprinkle with half of remaining cheese.
Top with remaining macaroni. Sprinkle on remaining cheese.
Melt remaining 1 tablespoon butter in small skillet over medium heat. Add bread crumbs and toss to coat.
Sprinkle buttered crumbs over top of macaroni.
Place in preheated oven and bake until bread crumbs are lightly browned, about 30 minutes.
Let stand 5 minutes before serving.
Serve hot.