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Heat butter in a skillet over medium heat; stir in onion. Cook and stir until the onion has softened and turned translucent, about 5 minutes.
Stir in cabbage. Add water, cover, and simmer gently on low heat for ten minutes.
Add potatoes and stir well; cover and simmer for 10 more minutes, adding additional water if needed.
Sprinkle seasoning salt and paprika over cabbage and potatoes; simmer, covered, until cabbage is soft and potatoes are fork-tender. Mix in ham; simmer until heated through.