I say "Gesundheit" which is "good health" in German. I don't worry too much about what others are saying, it is like an automatic response when you hear a sneeze. I doubt most people even think about what they're saying.

I'm not offended it reminds me that it has its origins in the middle ages in the time of the Black Death when the bubonic plague mutated to become the pneumonic plague and a sneeze was the first sign of the fact that you were going to die. You do remember your nursery rhymes don't you? Ring Around the Rosie?